Japan breaks ranks with US allies, buys Russian oil above $60 barrel cap
Tokyo (Japan), April 3: The US has rallied its European allies behind a USD 60-per-barrel limit on Russian crude oil purchases, but one of Washington's closest Asian allies, Japan, has begun buying the oil at rates higher than the cap, according to the Wall Street Journal.
Japan persuaded the United States to make the exemption, stating that it was necessary to ensure access to Russian energy. The concession highlights Japan's reliance on Russia for fossil fuels, which many believe has contributed to Tokyo's reluctance to fully assist Ukraine in its conflict with Russia.
Despite the fact that numerous European nations have reduced their reliance on Russian energy supplies in last year, Japan has increased its purchases of Russian natural gas.
Japan is the only G-7 country that does not supply Ukraine with lethal weapons, and Japanese Prime Minister Fumio Kishida was the last G-7 leader to visit Ukraine after Russia invaded the country.
While the oil imports are small and permitted by the US, they represent a break in the US-led push to impose a global USD 60-per-barrel restriction on Russian crude oil purchases.
According to the Wall Street Journal, the cap works because oil-buying countries, even if they are not US allies, sometimes demand insurance and other services from companies located in the US or one of its allies. The G-7, the EU, and Australia have agreed to restrictions that prevent those businesses from providing services if a buyer of Russian oil pays more than USD 60 per barrel.
Last year, the countries agreed to exempt oil acquired by Japan from Russia's Far East Sakhalin-2 project from the cap until September 30.
According to a Japanese Ministry of Economy, Trade, and Industry official, Tokyo intends to ensure access to the main product of Sakhalin-2, natural gas, which is liquefied and shipped to Japan. "We have done this with an eye toward having a stable supply chain of energy in Japan."
He stated that a tiny amount of crude oil is extracted alongside the natural gas at Sakhlain-3 and must be sold in order for LNG production to continue. "The price is determined by negotiations between the two parties," he explained.
Russia accounts for almost one-tenth of Japan's natural-gas imports, the majority of which come from Sakhalin-2, and the quantity acquired by Japan last year was 4.6% more than the previous year.
- ANI
