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FDR didn't cut off Japan's oil because of their occupation of China. During Japan's occupation starting 1937 American companies were making plenty of war profits supplying oil and metal to Japan's military, with the US government only sending strongly worded letters.

Japan's oil was cut off in 1941 because they started seizing Southeast Asian colonies of European powers that had been occupied by Germany in 1940, and these colonies were significant suppliers of oil and rubber for the conflict in Europe. If Japan had limited its activities to China the US might have continued its war profiteering indefinitely.




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