The Insuring State: Japanese Oil Import Security and the Middle East

Abstract

This article investigates Japanese approaches to managing oil import security in the period 1970–2005 by developing a framework that integrates portfolio and inducement approaches to managing import security. It argues that Japan is an insuring state and, in the context of continuing asymmetric dependence, seeks to ensure its security not only through portfolio strategies that aim to reduce systemic and specific risks, but also through political and economic inducements that reinforce those portfolio strategies. Empirical evidence suggests that these strategies have enhanced Japan's insurance cover against oil unanticipated supply disruptions and has enhanced its relative security over the period. The Japanese case suggests the importance of exploring portfolio strategies and structures as power in addition to other forms of non-military power, such as economic aid and diplomacy, in understanding international economic security.