Japanese Prime Minister Fumio Kishida delivers a speech at Guildhall in London, Britain, May 5, 2022. REUTERS/Peter Nicholls
TOKYO, May 9 – Japan will take time to phase out Russian oil imports after agreeing with other Group of Seven (G7) nations on a ban to counter Moscow’s invasion of Ukraine, prime minister said Fumio Kishida on Monday.
The G7 pledged the move “timely and orderly” at an online meeting on Sunday to keep pressure on President Vladimir Putin, even as members like resource-poor Japan are heavily dependent on Russian fuel. Continue reading
“For a country that is heavily dependent on energy imports, this is a very difficult decision. But G7 coordination is most important at a time like this,” Kishida told reporters, echoing comments he made at the G7 meeting.
“As for the timing of reducing or stopping (Russian) oil imports, we will take that into account while assessing the actual situation,” he said. “We will take our time to take steps towards an exit.” He didn’t elaborate.
According to data from Refinitiv, there have been no ships loading Russian oil to Japan since mid-April. 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.
Crude oil imports from Japan since 2013
The Ukraine crisis has highlighted Japan’s energy dependency on Russia, although Tokyo has acted swiftly and in concert with the G7 in imposing sanctions.
The latest ban underscores a turning point in Japan’s politics. Japan has said it is difficult to immediately cut off Russian oil imports, which accounted for about 33 million barrels of total Japanese oil imports, or 4% for 2021. read more
It has already announced plans to phase out Russian coal imports, leaving only liquefied natural gas (LNG). Japan is in a particularly difficult position, having shut down most of its nuclear reactors following the 2011 Fukushima nuclear disaster.
Russia was Japan’s fifth largest supplier of crude oil and LNG last year.
The Japanese government and companies own interests in oil and LNG projects in Russia, including two on Sakhalin Island, from which partners Exxon Mobil Corp (XOM.N) and Shell PLC (SHEL.L) have announced their exit.
Still, Japan’s largest oil refiner, Eneos Holdings Inc (5020.T), has already stopped buying Russian crude and said it would receive supplies from the Middle East. Second-placed Idemitsu Kosan Co Ltd (5019.T) also said it had no plans to buy Russian crude. Continue reading
“Japan’s major refiners have already suspended signing new contracts to buy Russian oil and there have been no problems securing alternatives,” Shinya Okuda, senior managing director of the Petroleum Association of Japan (PAJ), told Reuters.
“Refiners will continue their efforts to diversify supply sources, but Japan’s dependence on Middle East crude oil will need to increase in the short term because the region’s supply capacity is so high,” he said. The Middle East accounted for 93% of Japan’s oil imports in 2021.
On Friday, trading company Marubeni Corp (8002.T) said it intends to withdraw from the Sakhalin-1 oil project but is keeping its stake in line with government policy. Continue reading
Kishida said Monday there was no change in the government’s policy of safeguarding business interests in Russia’s various energy assets.
PAJ’s Okuda said it would be better to keep the concessions in view of Japan’s energy situation and it would be unwise to give them up and let China or others take care of them since Japan has the concessions on good terms.
Reporting by Yoshifumi Takemoto and Yuka Obayashi; writing by Leika Kihara and David Dolan; Edited by Lincoln Feast, Himani Sarkar and Kenneth Maxwell