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Japan Working With Allies to Strengthen Sanctions

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Japan has said it will work with its Western allies as they step up sanctions against Russia following its invasion of Ukraine.

"As the international community strengthens sanctions against Moscow, it's in Japan's best interests to cooperate with G7 nations to ensure a stable and secure energy supply, as best it can,” Trade Minister Koichi Hagiuda told reporters on Tuesday.

"If Russia doesn't feel the pain from the sanctions, then it would be pointless," he said in separate remarks to parliament on Tuesday.

Hagiuda was speaking before the US and UK announced bans on the import of Russian oil on Tuesday.

In addition to Japan, the US and UK, the G7 nations include Canada, France, Germany and Italy.

Japan imported 89,000 barrels per day of crude oil in 2021 from Russia, which was its fifth-largest source of imports. Most of its imports come from Middle East oil producers, including Saudi Arabia and the United Arab Emirates.

Hagiuda also told parliament that Japan was looking at how it can protect the interests of Japanese companies whose energy investments in Russia include the Sakhalin-1, Sakhalin-2 LNG and Arctic LNG-2 projects.

While major Western oil and gas companies such as BP, Shell and Exxon Mobil have announced plans to exit their investments in Russia, Japanese firms Mitsubishi, Mitsui and Japex have said they are still assessing the situation.

"Our main concern is whether a third country might immediately take over when we let go of our interests there," Hagiuda told parliament.

Japanese politicians are understood to be concerned that if Japanese companies exit Russia, that would pave the way for Chinese companies to replace them.

Japan has also announced further sanctions, which include bans on exporting oil refining equipment to Russia and “dual-use” products to Belarus.

The government said 32 Russian and Belarusian individuals as well as 12 entities, including military-related companies, have been added to a list of people, companies and other entities targeted for asset freezes in Japan.

Tokyo has previously frozen the assets of Russian President Vladimir Putin and Belarusian President Alexander Lukashenko, as well as taking part in the effort to cut Russian banks off from Swift, the international financial messaging system.

Soaring oil prices recently prompted Japan to raise the ceiling for subsidies on gasoline, diesel and kerosene to cushion the impact of higher energy costs on its economy.

The government has also said that Japan holds sufficient oil reserves to cover about 240 days worth of consumption.

Topics:
Sanctions, Military Conflict, Trade, Oil Supply, Oil Prices, LNG Projects, LNG Supply, Ukraine Crisis
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