Page 11 - AsianOil Week 19 2022

AsianOil EAST ASIA AsianOil

Japan agrees to G7 ban

of Russian oil imports

POLICY JAPANESE Prime Minister Fumio Kishida this refiners have already suspended signing any new
week announced an eventual ban on all imports term contracts to buy Russian oil and there have
of Russian oil. been no issues in securing alternatives.”
Speaking to reporters after he had agreed Both Eneos and Idemitsu are known to have
with other Group of Seven (G7) member coun- turned to Middle Eastern suppliers to make up
tries, Kishida did, however, caution that the deci- any shortfall.
sion was a very difficult one. “Refiners will continue their efforts to diver-
Some view the phrase, and others used in sify supply sources, but Japan’s dependency on
subsequent statements, as a potential future the Middle East crude will have to increase in the
get-out clause. It has already been speculated short term as the region’s supply capacity is so
in Japan that the lack of clarity in Kishida’s high” Okuda added.
announcement may eventually allow Tokyo to In 2021, Middle Eastern countries accounted
refrain from a complete ban despite pressure for 93% of all Japanese imports, with Russian
from the international community. imports of around 33mn barrels amounting to
“For a country heavily dependent on energy another 4% of the total. When combining ship-
imports, it’s a very difficult decision. But G7 ments of crude and LNG, Russia ranked fifth
co-ordination is most important at a time like in terms of energy exports to Japan last year –
now,” Kishida said. He added that the country showing that scaling back gas imports would be Both Eneos and
would consider the timing of any reduction or more of a challenge. And the country remains
stoppage of oil imports from Russia while gaug- committed to its own investments in Russia. Idemitsu are
ing the actual situation. “We will take our time to Indeed, Marubeni has said that it wants to
take steps towards a phase-out,” he added. withdraw from oil and gas projects on eastern known to have
It is understood that no Russian cargoes to Russia’s Sakhalin Island, but that it is maintaining
Japan have been initiated for almost a month. its holdings in the region as per current govern- turned to Middle
As a result, figures released by Refinitiv indi- ment policy. Eastern suppliers
cate that shipments to Japan from Russia in the Earlier this week, Kishida, speaking about
month of April were 33% down on the same Japanese government holdings in Russia’s Far to make up any
period last year, with only around 1.9mn barrels East, said there would be no change in national
transported. policy. As such, Japanese stakes in oil and LNG shortfall.
It will be up to individual companies to align energy projects there and elsewhere will be
themselves with policy. Eneos Holdings, which maintained for now.
is the country’s largest refiner, is no longer pur- It is a status-quo currently supported by the
chasing Russian crude. A similar move has been PAJ, with Okuda saying that in East Asia’s cur-
made by Idemitsu Kosan, Japan’s second-larg- rent geopolitical climate, it is better for Japan to
est refiner, with officials in the Japanese capital keep a hold of its Russian investments.
saying the firm has no plans to buy any Russian To give them up now, Okuda said, would
crude for the foreseeable future. not be the wisest move given that abandoned
Speaking to media in Tokyo, the senior man- stakes in Russian oil and gas projects could
aging director of the Petroleum Association of be snapped up by Chinese investors and
Japan (PAJ), Shinya Okuda, said: “Japan’s major other companies.™

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