Why was Japan's oil supply cut off in World War 2 and why was this such a threat to them?

At the time Japan was dependent on the U.S. for their oil supplies (there was no OPEC yet). Japan's military operations in China were seen as dangerous to the U.S. so Roosevelt cut off the oil shipments to Japan knowing that without it their Navy and army would ground to a halt eventually. He hoped this would make them come to the bargaining table instead they came to pearl harbor, and Singapore, etc.. Watched a program today (May 3) about Japan and it's occupation of China/Manchuria. Needing resources such as oil, Japan readied for an invasion of Russia (from occupied sites in Manchuria). Russia discovered the plan and virtually annihilated the unsuspecting Japanese forces, as well as 500 Japanese planes. Also at this time Hitler was attempting to align (or maybe Germany already was..sorry do not remember this...) or take over parts of mid-east, specifically oil rich Iraq, and Iran. Hitler and the Japanese had eventually hoped to meet up in India, sealing their alliance. However the defeat of the Japanese by the Russians stalled this plan. At this point the Japanese leaders decided to attack the American Pacific Fleet in Pearl Harbor. Hoping to catch us by surprise they thought they may be able to buy time to expand deeper into western Asia to secure much needed oil, raw materials, and farmland. They believed the U.S. would not tolerate further expansion efforts by them, especially because of their alliance with Hitler, and if they were going to spread westward they were going to have to disable the US fleet to give themselves a running start..or so they thought.

Japan and the Soviet Union did fight a major engagement, but it was more of a border war than a Japanese invasion. The offensive launched by Zukov was a factor in dissuading the Japanese from a Strike North to a Strike South strategy. The other key event was the NAZI-Soviet Non-Aggression Pact which undercut those advocating a Strike North faction in the Imperial Army. For details on the victory of the Strike South faction see:

The Roosevelt Administration tried to deal with the Japanese diplomatically Diplomatic efforts were followed by a series of largely symbolic embargoes. The oil embargo was only implemented after the Japanese moved into southern Indochina, a clear indication that they were planning an aggressive military action. And the Roosevelt Administration were able to assess Japanese intentions with great accuracy because they had broken the Diplomatic Purple code, but unfortunately not the Imperial Navy JN-25 code. Efforts to deal with the Japanese diplomatically were in the end futile. The Militarists who controlled Japan were intent on the completing the conquest of China. And their solution to military stalemate in China was another war, this time with America and Britain.