Crude Oil Spike Could Add ¥50,000 to Japanese Households’ Annual Costs

Dubai Crude Nearly Doubles in March

Japan relies on Middle Eastern oil for 95% of its oil imports, and the 2025 average price of Dubai crude, a benchmark for Middle Eastern oil, was $68 per barrel. However, prices surged following the first attacks on Iran by the United States and Israel on February 28, 2026. It reached $169.8 on March 19, with the March average rising to $124.3, or about 1.8 times the 2025 level.

Credit research company Teikoku Databank calculated the impact on household finances under three scenarios for Dubai crude prices in 2026: Scenario 1, a 20% increase from the previous year; Scenario 2, a 50% increase; and Scenario 3, a 100% increase. The estimates are based on wage-earning households with two or more members.

The company’s analysis showed that the average annual consumption expenditure rose by ¥10,078 under Scenario 1, ¥25,194 under Scenario 2, and ¥50,388 under Scenario 3.

For households with annual incomes below ¥2 million, the increase in burden is about half the overall average in all scenarios. However, since these households’ expenditures exceed 95% of their income, any additional burden will have a serious impact on their livelihood. This group is believed to consist largely of nonregular workers, such as part-time and contract employees. Pensioners would also be significantly affected.

For households with annual incomes of ¥15 million or more, the burden rises to ¥86,919 under Scenario 3. The impact, however, is smaller than for low-income households, as these households’ expenditures account for only about 40% of their income.

Crude oil prices are directly reflected in the cost of diesel, gasoline, petroleum products, and air transport. However, a Teikoku Databank representative said the price hike is also expected to “increase logistics and production costs, putting upward pressure on overall commodity prices.” In terms of consumer price growth, the rate is expected to increase by 0.25% under Scenario 1, 0.63% under Scenario 2, and 1.26% under Scenario 3.

Data Sources

• Analysis of how soaring oil prices affect inflation and household spending (Japanese) by Teikoku Databank.

(Translated from Japanese. Banner photo © Pixta.)