The survey reinforces Japan's acute sensitivity to the Iran war: with almost all crude imports sourced from the Middle East, any further disruption to Gulf shipping (like this), such as this week's tanker attack north of Qatar, feeds directly into corporate costs and margins. That leaves energy-intensive sectors such as materials, chemicals, cement and transport most exposed if oil stays elevated, while higher fuel import bills add to pressure on the yen. A tilt towards second-half earnings downgrades could weigh on Japanese equities heading into the results season, particularly if crude stays high and the Bank of Japan keeps tightening. Concerns about the durability of AI spending point to downside risk for chip equipment and data centre suppliers that have led the market.---Japan Inc's biggest worry is no longer the yen or the Bank of Japan but the price of oil, and it is starting to cloud the profit outlook for the second half of the year.Summary:About 37% of Japanese firms named crude oil market volatility as the top risk to earnings, ahead of foreign exchange moves (21%) and rising interest rates (19%), according to a Reuters surveyThe Iran war, which began on 28 February, has constrained crude supply and pushed up the cost of energy and oil-derived products; Japan sourced 94% of its crude imports from the Middle East in 2025Several firms also flagged doubts over how long AI-related investment will lastFor the first half of the fiscal year, 32% expect net earnings to beat their own forecasts and 22% expect a missFor the October-to-March half, the outlook turns cautious: 22% expect to fall short and 20% expect to beat forecastsThe survey of 215 firms was conducted by Nikkei Research for Reuters from 18 September to 2 OctoberVolatility in the global oil market has become the biggest threat to Japanese corporate earnings, ranking ahead of currency fluctuations and rising interest rates, a Reuters survey showed on Thursday.About 37% of respondents identified crude market volatility as the leading risk to their earnings prospects, while 21% chose foreign exchange moves and 19% picked higher interest rates. The poll was conducted by Nikkei Research for Reuters between 18 September and 2 October, with 215 of the 508 companies contacted responding on condition of anonymity.The concern reflects Japan's heavy reliance on imported energy. The country sourced 94% of its crude oil imports from the Middle East in 2025, and the US-Israeli war on Iran, which began on 28 February, has restricted supply and lifted prices for energy and a wide range of oil-based products, including auto parts and construction materials. A ceramics sector manager said rising energy costs, together with investment cutbacks that are cooling domestic cement demand as rates climb, were the key risks facing the business.Higher borrowing costs are a growing theme. The Bank of Japan raised interest rates to a 31-year high last month, and Governor Kazuo Ueda signalled the central bank had entered a new phase focused on preventing inflation from overshooting its target, leaving the door open to further increases. A real estate executive said higher rates were bound to slow property demand.Several respondents also pointed to uncertainty over the durability of investment linked to artificial intelligence, which has driven demand for advanced chips and a rapid expansion of data centres. One machinery maker said it was vital for companies to judge how long the AI-driven boost to demand would last and when it might start to fade. A Tokyo-based think tank said last month that AI investment is likely to grow over the medium to long term, but that power constraints, tighter regulation and rising costs could slow its pace.Near-term results look steadier than the outlook beyond them. For the April-to-September half, 32% of firms expect net earnings to beat their own forecasts, 22% expect to miss and 46% see results in line. For the October-to-March period, however, 22% expect to fall short, slightly more than the 20% expecting to beat, while 58% see their initial forecasts as intact. Half-year earnings announcements begin later this month and run into November, giving the first read on how far energy costs are squeezing margins. This article was written by Eamonn Sheridan at investinglive.com.