Japan Breaches Oil-Price Cap

"TOKYO -- The U.S. has rallied its European allies behind a $60-a-barrel cap on purchases of Russian crude oil, but one of Washington's closest allies in Asia is now buying oil at prices above the cap.

Japan got the U.S. to agree to the exception, saying it needed it to ensure access to Russian energy. The concession shows Japan's reliance on Russia for fossil fuel, which some analysts said contributed to a hesitancy in Tokyo to back Ukraine more fully.

While many European countries have reduced their dependence on Russian energy supplies, Japan has stepped up its purchases of Russian natural gas over the past year. Japan is the only Group of Seven nation not to supply lethal weapons to Ukraine, and Prime Minister Fumio Kishida was the last G-7 leader to visit Ukraine after recent events.

Mr. Kishida has said the G-7 summit he is hosting this May in his hometown of Hiroshima will demonstrate solidarity with Ukraine. Tokyo has said it is committed to supporting Kyiv and can't send weapons because of longstanding export restrictions the cabinet has imposed on itself.

The oil purchases, while tiny and authorized by the U.S., represent a break in the unity of U.S.-led efforts to impose a global $60-a-barrel cap on purchases of Russian crude oil.

The cap works because oil-buying nations, even if they aren't aligned with the U.S., generally need to use insurance and other services from companies based in the U.S. or one of its allies. The G-7, the European Union and Australia have agreed to rules forbidding those companies from furnishing services if a buyer of Russian oil is paying more than $60 a barrel.

The nations last year granted an exception to the cap through Sept. 30 for oil purchased by Japan from the Sakhalin-2 project in Russia's Far East.

An official of Japan's Ministry of Economy, Trade and Industry said Tokyo wanted to ensure access to Sakhalin-2's main product, natural gas, which is liquefied and shipped to Japan. "We have done this with an eye toward having a stable supply of energy for Japan," the official said.

He said a small quantity of crude oil is extracted alongside the natural gas at Sakhalin-2 and needs to be sold to ensure liquefied natural gas, or LNG, production continues. "The price is decided by negotiations between the two parties," he said.

Russia accounts for nearly 10% of Japan's natural-gas imports, most of it from Sakhalin-2, and the quantity bought by Japan last year was 4.6% greater than in the previous year.

That marks a contrast with Germany, which relied on Russia for 55% of its natural-gas imports before the events and survived a complete cutoff through a quick remodeling of its import infrastructure. Germany's economy grew last year faster than Japan's, bucking forecasts of a German recession triggered by the cutoff of Russian gas.

"It's not as if Japan can't manage without this. They can. They simply don't want to," said James Brown, a professor at Temple University's Japan campus. Prof. Brown, who studies Russia-Japan relations, said Japan should move to withdraw from the Sakhalin projects eventually "if they're really serious about supporting Ukraine."” [1]

Why doesn't Lithuanian stupid broiler chicken attack Japan? Germany just got lucky. The winter was warm, and China, struggling with Covid, didn't need much gas. Now the situation has normalized, Germany (together with its satellite Lithuania) will have it difficult. The German leader Scholz is as stupid as our Broiler. Well, the German foreign minister, former prostitute, Annalena Charlotte Alma Baerbock is quite soft: she keeps turning 360 degrees, so she always ends up in the same place and wonders why she ends up here. There is not a single IT specialist in Germany to explain to her why this happens.

 

1.  World News: Japan Breaches Oil-Price Cap
Landers, Peter.  Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 03 Apr 2023: A.6.