Iraq is the one attacking you, friend, and you've already dedicated forces. I doubt he'll be very forgiving and appeasement has a track record of failing in the past...
Ah, of course.......................
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Japan instead relies on synthetically produced petroleum products
That isn't a switch you can immediately rely on. You have to begin to exponentially increase coal and natural gas imports (and guess where that comes from, an OPEC member). Your economy will become crippled. Then you'd have to actually build the plants to make the products. And then your gas companies will have to invest in these technologies. Then they'd have to import the new fuel, nationwide, differently. While having to lay off people and while losing money, because now they have no crude oil to make into the economy-running life blood of capitalism.
And I was dumb for actually blockading your black gold, let's just exponentially raise the prices I am trading to you by 3.
I am not going to properly allow a Japanese military movement in my own continent using oil.