Japan Increases Energy Imports from Russia Despite Anti-Russian Hesitation...

Japan imports 678 billion yen of Russian LNG
Also imports Russian crude oil under $70
High dependence on Russian energy leads to continued imports
Criticism over lack of efforts to find alternative suppliers

As part of economic sanctions against Russia, Western countries have imposed restrictions on imports of Russian energy, but Japan has instead been increasing its energy imports. Japan's high dependence on Russian fossil fuels has made it hesitant to actively participate in the anti-Russia coalition in the energy sector.

◆ Japan Appeals for Energy Stockpile Shortage... Purchases Russian Crude Oil and LNG

On the 3rd (local time), the Wall Street Journal (WSJ) reported that since the outbreak of the Russia-Ukraine war, Japan imported liquefied natural gas (LNG) worth 678 billion yen from Russia last year. This amount increased by 300 billion yen compared to the 371 billion yen purchased in 2021, accounting for 8.8% of Japan's total LNG imports.

Most of the Russian imports came from the Sakhalin-2 project, a Russian Far East energy development project. About 60% of the LNG produced at Sakhalin-2 was exported to Japan.

[Image source=Reuters Yonhap News]

Japan, citing a shortage in fuel stockpiles, purchased Russian crude oil at prices higher than the price cap set by Western countries. WSJ reported that Japan bought 748,000 barrels of Russian crude oil produced at Sakhalin-2 over two months starting January for 6.9 billion yen (681.24 million yen). When converted to dollars, it is estimated that Japan purchased crude oil at less than $70 per barrel.

This amount exceeds the $60 per barrel price cap on Russian crude oil set by the Group of Seven (G7) and the European Union (EU). However, the G7 countries decided to exempt the price cap on Sakhalin-2 production until September 30 this year, as they recognized that applying the cap could cause problems in Japan's electricity and gas supply.

◆ Japan's High Dependence on Russian Energy... Criticism for Lack of Efforts to Find Alternatives

The reason Japan is taking a path opposite to Western countries that are cutting off Russian energy imports is its high dependence on Russian energy.

Japan relies mostly on imported natural gas and coal for electricity, and power generated from LNG imported from Sakhalin-2 accounts for 3% of Japan's total electricity supply. A Ministry of Economy, Trade and Industry official told WSJ, "Japan wants to ensure reliable access to LNG produced by the Sakhalin-2 project."

Accordingly, unlike Western companies withdrawing from Sakhalin resource development, Japanese companies have not sold their shares in the Sakhalin project. Mitsubishi Corporation and Mitsui & Co. hold 10% and 12.5% stakes respectively in the Sakhalin-2 project operating company. Additionally, although Japan decided not to import crude oil produced from the Sakhalin-1 project since May, it continues to maintain its equity stake in the company operating the project. Major foreign media have analyzed that Japan made this decision to strengthen control over the Far East energy development projects.

An oil pumpjack located in Khanty-Mansiysk, a western autonomous district of Russia.

Japan's actions have been criticized as contradicting the anti-Russia coalition of G7 countries. While Germany, which had a higher dependence on Russian energy than Japan, has been taking measures, Japan has made no efforts. Germany depended on Russia for 55% of its natural gas imports but has accelerated efforts to reduce reliance on Russian gas by building LNG import terminals and importing LNG from the United States.

Professor James Brown of Temple University, who studies Russia-Japan relations, said, "Japan does have alternatives besides this method (importing Russian crude oil). They just don't want to find solutions even though they can. If Japan is serious about supporting Ukraine, it should withdraw from the Sakhalin project," he pointed out.

This content was produced with the assistance of AI translation services.