Middle East conflict drives up fuel costs, Japan's spot electricity price hits three-year high

Golden Ten Data reported on March 31 that spot electricity prices in Japan have surged to a three-year high due to the Middle East war driving up fuel costs for economies across Asia. On Tuesday, the spot price for next-day delivery jumped to 23.15 yen (about 14 cents) per kilowatt-hour, up 32% from a week earlier and reaching the highest level since January 2023. Power generation in Japan is highly dependent on imported fossil fuels. With key trade routes closed and energy facilities damaged, the conflict among the US, Israel, and Iran has caused crude oil and natural gas prices to soar significantly. In addition, the war has also pushed up the prices of alternative fuels such as coal. According to the Japan Meteorological Agency forecast, most parts of Japan will see cloudy and rainy weather on Wednesday, which may suppress solar power generation and further drive up spot electricity prices.