Japan: It will take time to cut off Russian oil imports

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Japan will take time to stop importing Russian oil after agreeing to a ban with the other G7 countries in response to Moscow’s invasion of Ukraine, Prime Minister Fumio Kishida said today.

The G7 countries pledged to make the move “in a timely and methodical manner” at an online conference on Sunday to put further pressure on President Vladimir Putin, although members such as Japan’s poor resources depend heavily on degree of Russian fuel.

“For a country that is heavily dependent on energy imports, it is a very difficult decision. But coordination with the G7 is more important at a time like today,” Kishida told reporters, reiterating comments he made at the summit. G7.

“As for the timing of the reduction or cessation of (Russian) oil imports, we will look at it while assessing the current situation,” he said. “We will need time to take steps towards a phasing out.” He did not say more.

There are no ships loading Russian oil to Japan since mid-April, according to Refinitiv. About 1.9 million barrels were exported from Russia to Japan in April, down 33% from the same month last year.

The country imported a total of 89 million barrels of oil in March.

The crisis in Ukraine underscored Japan’s energy dependence on Russia, although Tokyo acted quickly, along with the G7, to impose sanctions.

The ban underscores a shift in Japanese politics. Japan has said it will be difficult to immediately cut off Russian oil imports, which accounted for about 33 million barrels, or 4% of Japan’s total oil imports by 2021.

It has already said it will phase out imports of Russian coal, leaving only liquefied natural gas (LNG). Japan is in a particularly difficult situation after shutting down the bulk of its nuclear reactors following the 2011 Fukushima nuclear disaster.

Russia was the fifth largest supplier of crude oil and LNG to Japan last year.

The Japanese government and companies have stakes in gas and LNG projects in Russia, including two in Sakhalin Island, of which Exxon Mobil and Shell have announced they will leave.

However, Japan’s largest oil refinery, Eneos Holdings, has already stopped buying Russian crude, saying it will receive supplies from the Middle East. The second largest, Idemitsu Kosan, has also said it has no plans to buy Russian crude.

“Japan’s largest refineries have already suspended signing new futures contracts for Russian oil and there have been no issues in securing alternatives,” Xinia Okuda, director of the Petroleum Association of Japan (PAJ), told Reuters.

“Refineries will continue their efforts to diversify their sources of supply, but Japan’s dependence on Middle East crude will have to increase in the short term as the country’s supply capacity is so high,” he said. The Middle East accounted for 93% of Japan’s oil imports in 2021.

On Friday, the Marubeni trading company said it wanted to withdraw from the Sakhalin-1 oil program, but would retain its share in line with government policy.

Kishida said today that there was no change in the government’s policy of maintaining business interests in Russian energy assets.

PAJ Okunda said it was better to preserve the rights given Japan’s energy situation, and it would not be wise to abandon them and let China or other countries take them, as Japan has those rights on good terms.

source: ΑΠΕ

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