Japan's economy 'most exposed' in Iraq war

SYDNEY, Australia (CNN) -- Japan is Asia's most exposed economy to a possible U.S. war on Iraq because of its high dependence on imported energy and exports, according to a new regional analysis.

Oil accounts for 52 percent of Japan's total energy supply, and about 86 percent of its $50 billion in annual oil imports comes from the Middle East.

That is a far higher figure than the 25 percent dependency on Mid-East oil for the United States and 5 percent for the U.K., according to Japan's New Energy Foundation.

South Korea and Taiwan are also heavily dependent on oil from the Middle East. Between them, the three countries account for about 85 percent of East Asia's oil imports.

Military analysts say oil tankers heading out of the Arabian Gulf would likely become targets if hostilities break out. That in turn would put pressure on oil supplies in Asia, despite most refiners keeping reserves of at least 70 days.

On Tuesday the U.S. Navy warned that al Qaeda terrorists may be planning attacks against tankers, sending oil prices to $30 a barrel on the NYMEX Wednesday. (Full story)

West Texas Intermediate for October delivery closed at $29.77, after briefly touching the $30 mark. In London, Brent crude closed at $28.40.