Page 9 - AsianOil Week 48 2022

AsianOil EAST ASIA AsianOil

Sakhalin 2 oil shipped to Japan will be

excluded from Russian price cap

INVESTMENT THE Japanese government has confirmed that of maintaining stable operations.”
oil from Russia’s Sakhalin II project destined for In reaction to the sanctions, Russia
The price cap came into Japan will be excluded from the price cap that the announced in June that it was transferring the
force on December 5. Group of Seven and other industrial countries project to a new operator. It later allowed Jap-
intend to impose on Russian crude oil in early anese energy giants Mitsui & Co. and Mitsub-
December. The price cap has yet to be set, but it ishi Corp. to rejoin the project. Japan, which
is expected to be near $60/b. is highly reliant on imported LNG, imports
The US Treasury Department announced around 9% of its LNG imports from Sakhalin
the decision on Sakhalin II oil exports last week. II.
Two Japanese energy companies continue to be Nishimura added that Russian oil from
shareholders in the project despite the sanctions other locations would fall under the price cap
imposed on Russia after it invaded Ukraine in guidance, including Sakhalin I, where Japanese
February of this year. companies Itochu Corp. and Marubeni Corp,
The US is leading the Group and Australia in have shareholdings.
efforts to reduce the revenue that Russia receives Russian spokeswoman Maria Zakharova
from its oil sales and uses to finance its war in said on 30 November that a price cap in Russia
Ukraine. Despite international sanctions, Rus- oil would disrupt supply chains and exacerbate
sia continues to sell large volumes of oil at dis- the conditions in the global energy market.
counted prices to several countries, particularly "We have repeatedly said that the intro-
China and India. Russia is strongly opposed to duction of the so-called ceiling on Russian oil
the price cap and has said that it will not sell oil prices is not just a non-market mechanism, it
to countries applying the price cap. is an anti-market measure," she said, repeating
Japan’s Minister of Economy, Trade and that Russia would not sell oil to those countries
Industry Yasutoshi Nishimura told reports on employing the price cap.
November 25 that as oil is produced at Sakha- Companies that fail to apply the price cap
lin II, which is primarily an LNG project, that risk being denied access to shipping, insurance
oil “needs to be exported from the perspective and other critical services. ™

Week 48 05•December•2022 www. NEWSBASE .com P9