Shipping disruptions in the Strait of Hormuz have led to a 30% year-on-year increase in electricity prices in Japan for the second quarter.

The International Energy Agency recently released a report stating that disruptions in shipping through the Strait of Hormuz have led to the average wholesale spot electricity price in Japan reaching $90 per 1,000 kilowatt-hours in the second quarter of this year, an increase of about 30% compared to the same period last year. According to a report by Kyodo News on the 1st, the disruption in shipping has resulted in a stagnation of liquefied natural gas supplies from the Middle East, causing the aforementioned impact. The report indicates that with rising electricity demand due to the scorching heat and a prolonged blockade, electricity prices may continue to rise. The report estimates that by the second half of 2026, the average wholesale electricity price in Japan will reach $105 per 1,000 kilowatt-hours, representing a year-on-year increase of approximately 40%. Data from Japan's Agency for Natural Resources and Energy shows that the electricity generated from thermal power using liquefied natural gas accounts for about 30% of Japan's total electricity generation, making electricity prices susceptible to fluctuations in the international liquefied natural gas market.