I realize that economically and militarily it was in a difficult position particularly with regard to the supply of Oil. However did Japan have any other avenues it could have taken other than military action?
Could it have perhaps attempted to source its needs from neutral nations e.g. in South America? what about developing techniques such as the manufacture of Synthetic oil as was used in Germany? Also didn't Korea and China have large amounts of Natural resources such as Iron and Coal that they could have developed?
In the interest of clarifying the question, are you asking with the idea that their other options would allow them to maintain their military presence in China?
Well, I hope I can at least give a sense why they did have to attack. The US was the main supplier to oil for Japan, the Japanese were dependent on US. While the Japanese were expanding in the 1930's in China, the US felt threatened by the Japanese expansion, the US did not at the time have a military that could go toe to toe with the Japanese full force, so the US knew they could hit the Japan hard with the oil embargo hoping they could cripple the Imperial Navy by restricting its oil supply. The Japanese knew they needed the East Indies oil to maintain its war machine. They knew they would have to go through the Philippines (a US territory at the time) to get the oil they needed. now about the Synthetic oil thing is you need to know most of the reason the Nazis invaded the USSR was for the oil in the Caucasus and the Battle of Stalingrad was so important and remembered in this front was that it was how the oil was transported from the Caucasus to Moscow using the Volga river. While Korea does not seem to have large oil reservoirs, China has a minimal amount in Western China it has some in the Northwest, but not as much as Borneo, and at the time was not as industrialized as Japan and that's why Japan could win because the Japanese had battleships, tanks, and aircraft. While the Chinese got most of supplies from lend-lease from the US.
Well, alternative things the Japanese could have done is try and help the Nazis with the invasion of the USSR, Russia won that front mostly from reserves in Eastern Russia. So, if the Japanese still expand West into China the USSR would have it's backbone weak and open for Japanese slaughter, giving the Nazis and Japanese the much needed supply oil for it's massive navy and air-force (in Japan's case) while the Nazis could support it's Luftwaffe and Panzer divisions in Africa and bully the UK more. While in this scenario the US was delayed from the war. See the US would've had to of not been in the war maybe for 12-18 months maybe. Giving the Nazis and Japanese breathing room, but still in this scenario the US still declares war for it's allies.
So, in the end no. The Japanese had to use military force for oil, because the embargo would only have been lifted if the Japanese left China and returned all former territories.
Sorry but most of this has came from documentaries done by the history channel back when they were obsessed with WWII.