Page 10 - AsianOil Week 13 2022

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Japan’s leading refiners snub Russian crude

PROJECTS & IN a move many had been predicting, Japan’s Japan’s third-largest refiner, Cosmo Energy
COMPANIES largest refinery, Eneos Holdings, has opted not Holdings, meanwhile confirmed it does not
to place any orders for Russian crude, according currently import Russian crude, and according
to a leading company official. to a company spokesman it has no plans to do so.
Speaking last week in Tokyo as the war in The comments from the Japanese refiners
Ukraine entered its second month, Eneos’ CEO come amid a global effort to reduce imports of
and head of the Petroleum Association of Japan, Russian fuels and were this week followed by
Tsutomu Sugimori, confirmed that the company similar announcements from TotalEnergies and
had not agreed to any supply contracts since the Shell. TotalEnergies intends to stop all Russian
Russian invasion of Ukraine on February 24. crude and diesel purchases by the end of the year,
Orders placed prior to the outbreak of war, and Shell is working to gradually decrease Rus-
however, will continue to arrive into April, sian oil and gas orders.
after which Japan’s largest refiner will be turn- In Japan, meanwhile, the ruling Liberal
ing to Middle Eastern suppliers to make up any Democratic Party (LDP) remains keen to main-
shortfall. tain a hold on billions of US dollars’ worth of
And whilst the decision by Eneos is a move investments in Russian Far East infrastructure.
that has been given a great deal of media cover- This is despite the fact that Russian authorities
age in Japan, it is understood that any impact of are planning to change contracts to have out- The comments
removing Russian imports from its portfolio will standing oil payments made in rubles rather
be minimal. Just 4% of all Eneos imports origi- than US dollars. from the
nated in Russia in the months leading up to the Japanese Chief Cabinet Secretary Hirokazu
invasion of Ukraine. Matsuno, instead of announcing a cessation Japanese refiners
The day after Sugimori spoke, essentially of co-operation with Russian sellers, has said
confirming the refiner would be toeing the gov- that Japanese companies should refuse if asked come amid a
ernment line in working to sanction Russian to make payments in rubles, especially in the global effort to
exports, a similar announcement was made by energy sector.
Idemitsu Kosan, Japan’s second-largest refiner. Earlier in the month Japanese Prime Minis- reduce imports of
In recent weeks, Japan has seen the prices of ter Fumio Kishida had called the Russian actions
commodities increase across the board and this in Ukraine something “we absolutely cannot Russian fuels.
was not lost on the Eneos CEO, who indicated accept” but also said Tokyo needed to keep Rus-
that prices could rise even higher with the appli- sian oil and gas imports flowing as “a part of the
cation of stricter sanctions on Moscow. national interest that we have to protect to the
“Unless major oil producers with extra output maximum extent possible”.
capacity, such as Saudi Arabia or United Arab Sakhalin Island in Russia’s Far East is home
Emirates, step up production … and if sanctions to the Sakhalin 1 and Sakhalin 2 projects, with
on Russia widen, oil prices will climb further,” he Japanese companies invested in both.
said. He added that the coronavirus (COVID- Last year it is estimated that almost 10%
19) pandemic had also slowed demand, and that of Japan’s gas and 4% of its oil imports came
higher oil prices were causing consumers to buy from Russia, and much of this from the
less gasoline. Sakhalin projects.™

P10 www. NEWSBASE .com Week 13 01•April•2022