Japan's Prime Minister Sanae Takaichi faces her first major crisis as oil market turmoil from the Iran war threatens to push the economy into recession. The country's heavy reliance on energy imports, particularly from the Middle East, has left it vulnerable to the recent surge in crude oil prices past $100 a barrel.

Economists warn of stagflation risks as Japan imports nearly all its energy and much of its food. The weak yen, trading near two-year lows, compounds the problem by making imports even more expensive. Takaichi's government is considering tapping strategic oil reserves to prevent petrol prices from rising to levels that would burden households.

This crisis comes just weeks after Takaichi's landslide election victory on promises to address rising food prices. The timing is particularly challenging as she must balance economic stability with her campaign commitments. Analysts say the situation highlights Japan's vulnerability to global energy market volatility and could force difficult policy decisions in the months ahead.