The Japanese government has decided to purchase Russian oil above $60 a barrel, contrary to an international price cap imposed by the United States, in a largely symbolic break with Western-led sanctions against Russia.
Japan made the decision, with U.S. approval, due to a lack of domestic resources and long-standing dependency on Russian hydrocarbon imports.
Since January, Japan has imported $52 million of Russian oil at under $70 a barrel, a fraction of its annual $103 billion worth of annual crude oil imports.
Despite this, Japan has been resolute in its condemnation of Russian actions in Ukraine and is expected to reaffirm its commitment to the Ukrainian cause when it hosts a G7 meeting in Hiroshima next month.
The G7, led by the United States, instigated the $60 price ceiling on Russian seaborne crude oil in December 2022 to limit the Kremlin’s ability to finance the war without harming global supply.
In terms of energy, Japan is regarded as the G7’s least energy self-sufficient nation, receiving a previous exemption to import gas from the Russian Sakhalin region due to both a lack of alternatives and pre-existing business arrangements between Japanese companies and Russia.
Tokyo reduced Russian coal and oil imports by 41% and 56% last year, though it was forced to increase Russian gas imports. Japan imports 94% of its primary energy needs and is reliant on crude oil from the Middle East. Some industry experts have predicted that Japan will fully replace Russia as an energy partner with Qatar or the United States.
An EU ban on Russian oil came into effect last month, despite Russian oil still entering the bloc. Germany in particular is feeling the fallout from energy sanctions in its domestic economy.
Japanese sanctions on Russia are not new. They have been in place since 2014. Nevertheless, Prime Minister Fumio Kishida’s hardline against Moscow is seen as a measure taken largely to placate the American lobby and set the tone against future Chinese aggression.
With inherent geopolitical concern about the rise of China and Japan’s need to remain an American ally, Japan has been careful to consult with the U.S. in its break with the West’s price caps. Japan must safeguard its relationship with the United States—especially with respect to Chinese expansionism—even if the decision underlines Tokyo’s vulnerability over energy security.
