There might not even be an embargo here. I just don't envision Japan being as aggressive with the west in a TL where they have oil in China. Without an occupation of Indochina it probably takes an additional year or two to force a proper embargo and by that time there's already a good chance America is involved in the war in Europe.
But why?
When the Second Sino-Japanese War broke out the British and the French supplied and supported China, which caused the Japanese anger and eventually the invasion of Indochina. See the case of the Tianjin incident, which almost caused the Pacific War 2 years earlier and signaled the world that Japan is firmly against the West, and that was before the Hull note, before the Embargo and before the Tripartite Pact.
What makes Japan not to move against the West, for the very same reason, in this scenario?
And even if there is an embargo on the same date as OTL, that gives Japan nearly five years to nail the refining process (plus additional time when the embargo kicks in to when they run down existing stocks). Everything else can be bought on the open market (at a mark-up). There will be a contraction of the Japanese economy but with oil it won't be the death blow to the economy as seen in OTL.
Five years to nail the refining process. On what basis do you think so?
You talked about 1935 before, so let's take a look. Japan in 1935 refined 38047 barrels per day and consumed 74593 barrels p/d. We see a deficit of 36546 barrels here, and so they imported 49660 barrels of fuel from external source. Those weren't crude oil, but refined petroleum products. And this was before the war, peacetime demands.
Since the crude oil is not those high-quality, foreign imported but heavy crude oil from Manchuria, just got discovered recently and hence totally unknown to the Japanese before, there would be a problem, because those refineries were operating on light crude oil and were orienting toward gasoline production to meet the rising demands. So refineries would first have to adjust to the new source, experimenting here and there, and rebuild their lines to accommodate Manchurian oil.
That is rather mounting task, because at that time Japan had little domestic developments. I talked about iso-octane before, and Japan tried to build those iso-octane producing facilities too in Heungnam, North Korea from 1939, except the project ended up botched because they had no trained engineers to operate the plants, had no automation technologies, the plant capacity was lacking, the technologies and methods used in the production was so inefficient that the plant's projected consumption of mercury amounted half of the total Japanese domestic mercury production, and even after wasting all those resources the end product could not achieve 100 octane rating. This was Japan at the time and this is the situation what we're talking about.
So that is just one problem with Japan's domestic refining capacity, technological backwardness, and then there's economic issue, because domestic refining capacity is rebuilding to accept heavy crude there would be production gap, and then there's gasoline problem which demand was skyrocketing but production would certainly be curtailed with heavy crude reorientation. To not get a 'death blow' from the Embargo those imported crude oil and products would have to be replaced by Liaohe oil production and domestic refining capacity, but as I have pointed out, Lioahe field can't cover up all oil demands and products, and also as I have pointed out, Japan's domestic capacity was so lacking that she had to import half of peacetime fuel consumption from external sources, let alone wartime consumption. They have to, literally, double their refining capacity to match up their internal consumption. And building refineries aren't cheap business. Building one single refining facility at Yokkaichi costed the Imperial Japanese Navy 250000000 Yen and that's about as same as the cost to build two Yamato-class battleships. Now, on what basis do you think so?
And, that 'open market'. What open market, may I ask?
Japan actually used mostly heavy fuel for the navy and diesel for the army, so the refining issue is actually less of a problem. Sure, aviation is definitely an issue, but for most of Japan's needs, there aren't that many technologically major issues.
Only for ships. Gasoline and diesel is still necessary to move motors and heavy fuel can't replace these. While diesel was used for tanks, the Army still need gasoline to move up all their other automotives. Then there's issue with aviation fuel. How these aren't problems? And as for 'technologically major issues', see above.