Japan’s cabinet on October 13 approved three bills aimed at strengthening energy supply security and offsetting higher costs of importing crude oil through routes that bypass the Strait of Hormuz.

The bills include measures to diversify ⁠crude oil and other fuel procurement and provide transport insurance support.

In light of the recent situation in the Middle East and structural changes in the global energy sector, as part of efforts to strengthen Japan’s energy supply-demand structure, the government took recently measures to diversify procurement sources and transport routes and reduce dependence on specific routes.

The bill on diversification of crude oil procurement would create a grant programme to compensate businesses for higher transportation costs when sourcing crude oil and fuels via alternative routes that avoid certain chokepoints such as the ​Strait of Hormuz.

“We will support businesses engaged in efforts to rationalize the use of designated waterways by providing support (grants) for the costs required to rationalize their use,” METI – Japan’s ministry of economy, trade and industry said in a statement.

It will be financed by contributions from designated petroleum product manufacturers and importers.

Another bill is intended to allow the government to cover part of insurance payouts for vessels engaged in the transportation of crude oil and other goods to Japan if foreign reinsurers are unable to provide coverage due to heightened geopolitical tensions, the industry ministry said.

To ensure the necessary insurance functions for maritime transport, the government has issued a request to domestic non-life insurance companies to ensure the necessary insurance functions for maritime transport.

A system will be established to provide payments of the amount necessary to fulfill obligations under insurance contracts.

The Strait of Hormuz is a critical chokepoint for global crude oil transportation, through which much of the Middle East’s crude oil passes.

In light of the deteriorating regional security situation, the need for Japan to institutionally promote diversification of procurement routes has grown increasingly urgent.

The three bills announced Tuesday by the industry ministry will be submitted for passage.