Teusday July 29, 1941. The Dutch Oil Embargo

On this day, the Dutch Government In Exile joined the United States and the United Kingdom and froze Japanese assets.

The impact of this on Japan was real, but not as great as sometimes suggested, nor was the "pressure" put on the Dutch as great as suggested.  The Netherlands were already at war with Germany and already an Allied power which was fully invested in a German defeat.  Aligning with the UK and the US was a foregone conclusion.

Japan actually had received 80% of it oil from the United States prior to the US embargo.  While the early focus of Japanese efforts would in fact be the Dutch East Indies, due to its oil supplies, that goal was to obtain a replacement source for oil, not to restore an existing primary source.  Of course, the Dutch embargo meant that Japan could not simply switch to the Dutch East Indies as a source.

Having said that, the Japanese were having success with occupied administrations, which was evidenced by their entering into a mutual defense treaty with Japan for the defense of Indochina, which was a practical matter already occupied by Japan.

It should be noted that this entire story has become somewhat distorted in recent years, with it commonly being claimed the embargoes "forced" Japan into war.  This isn't really directly correct, although it may be if given only a very short term analysis. 

The cause of the embargoes was Japan's intervention in Indochina.  US reaction to that, followed by the UK's and the Netherlands, was due to those nations being left with no other action at that time.  The US had already exhausted its diplomatic efforts in regard to Japan in protest of its actions in China.

The Japanese war in China itself was the reason for Japanese intervention in Indochina.  The Japanese may have been confused at the time of their intervention on what the US reaction would be, as early US signals concerning that were muddled, but the US had to react or had to acquiesce to the action. Acquiescence would have also acquiesced, effectively, to the French Indochinese colony passing to Japan and to the Japanese aggression in China.

On the Japanese in China, the US had consistently opposed that imperial effort.  It was really that action that led to the US countering of Japan economically.

Dutch cartoon from 1916 depicting Indonesia as its crown jewel.

It's sometimes been noted that Japan was simply acting like any other colonial power, but frankly this wasn't really true.  By the 1920s, when Japan really started becoming active in China, the colonial era was passing and China was a neighbor.  Without meaning to defend colonialism in any fashion, the era of colonizing immediate neighbors was long over and what little excuse remained for it was always focused on underdeveloped, if a person cares to look at it that way, regions of the globe.  In truth, the condition of the average Chinese citizen wasn't hugely different from the average Japanese citizen, and Japanese aggression was based to a very large degree on a combination of greed and racism.

By 1941 Japan had placed itself in a hopeless spiral towards war.  It couldn't leave Indochina and save face, and the US, which did not have a real colonial history, could not allow the aggression in Asia to go unnoticed.

The Dutch decision isn't without its long term ironies.  The Dutch were in fact cruel administrators in Indonesia and came to be hated.  They moreover fostered the development of a Chinese administrative class that came to the islands as immigrants and whom were favored by the Dutch over the native Indonesians.  Their record was so bad that the British did not allow the Dutch to return to power in Indonesia, and actually turned the post-war government over to politicians who had been Japanese collaborators. So somewhat ironically the ultimate Dutch invasion of Indonesia might be the one location where its propaganda for expansion accidentally came true.  More ironic yet, Indonesian oil never did become a significant oil replacement source for Japan, given the difficulties of actually importing it in wartime conditions.