Iran Conflict Triggers Naphtha Crisis in Japan

Naphtha is a byproduct of crude oil refining and is widely used in materials such as plastics, insulation foam, adhesives, synthetic fibers, medical supplies like syringes, and printing ink solvents.

According to a report by the British "Guardian," industries in Japan such as construction, dry cleaning, food processing, and paint production have felt the impact of the shortage of naphtha. A poll conducted by Kyodo News on the 17th showed that over 70% of respondents are concerned about the naphtha supply issue. Furthermore, a report by NHK on the 18th indicated that the naphtha shortage is manifesting in various forms in Japan, from relaxing regulations on garbage bag usage to redesigning food packaging.

Japanese snack maker Calbee announced on May 12 that it will change the packaging of 14 popular potato snack products from color to black and white starting on the 25th, until the ink shortage eases. Another food manufacturer, Kagome, has also changed the packaging of its ketchup products, deciding to use transparent backgrounds and reduce the number of tomato images on the packaging.

Toyobo Co. President Ikuo Takeuchi recently said that a shortage of naphtha has made it impossible for the company to forecast earnings for fiscal 2026. He said, “Since late March, we have seen various impacts, including on procurement. We should be able to hold out until June, but the outlook beyond July is uncertain.”

Due to the rise in prices of packaging materials and soybeans, Japan's Mizkan Company will increase the prices of 19 natto products by 6% to 20% starting in June. Additionally, four natto products have already been discontinued earlier this month. Japan's Daio Paper Corporation also plans to raise prices by at least 15% starting in August, affecting products including facial tissues, toilet paper, kitchen paper, diapers, and cleaning supplies.

The Japanese government is trying to downplay the impact of a naphtha supply shortage on related industries in Japan. Recently, members of the Japanese public have been panic-buying and stockpiling designated garbage bags, prompting Environment Minister Hirotaka Ishihara on the 15th to urge people to “remain calm and not engage in panic buying.” Ishihara said that the basic domestic supply of garbage bags in Japan is still secure and that there is no need for people to stockpile them. However, according to the Yomiuri Shimbun, designated garbage bags in some cities have already run out of stock, and local governments have begun allowing residents to temporarily use other plastic bags as substitutes.

In the construction industry, where many materials such as insulation materials and waterproof panels are highly dependent on naphtha, some housing construction projects have already fallen behind schedule. There are concerns that worsening raw material shortages could lead to sharp price increases for construction contracts signed from June onward.

Japanese Prime Minister Sanae Takaichi has repeatedly said she is looking for alternative energy sources other than oil, while refusing to publicly call on the public to reduce energy consumption. A poll conducted by Japan’s Fuji News Network from the 16th to the 17th showed that support for the Takaichi Cabinet has declined, with 80% of respondents worried that their lives will be affected by the situation in the Middle East, and nearly 60% dissatisfied or relatively dissatisfied with the government’s measures to address rising prices.