Authors

Takeo HIDAI¹;  ¹ Wako University, Japan

Discussion

As a result of Russia's assault ("special military operation") on Ukraine since February 2022, the G7 countries, including Japan, have imposed broad and strong economic sanctions on Russia, one of the world's leading hydrocarbon resource-rich countries, which also include oil, natural gas, and coal. Japan's dependence on Russia for hydrocarbon resources was approximately 4% for oil, 9% for natural gas, and 11% for coal before the assault. 

 It can be pointed out that, for Japan, which has scarce hydrocarbon resources of its own and is highly dependent on the Middle East for oil at above 95%, Russia is a source of supply diversification and has occupied an important position in terms of energy security. Since the 1990s, the Japanese Government and trading companies have worked together to promote the 'Sakhalin 1' and 'Sakhalin 2' projects and have lobbied the Russian side to construct the pipeline to transport crude oil from Eastern Siberia to the Pacific coast. In addition, a Japanese government-affiliated corporation (JOGMEC) and trading company (MITSUI & CO., LTD.) have acquired concessions in the Arctic natural gas project named Arctic LNG 2, in which the investment ratio of the Japanese side is 10%. 

 In this paper, we examine these Japanese policies towards Russia in relation to energy resources using a political economy approach and consider how these policies have (or have not) been changed after Russia's 2022 assault on Ukraine.

 A comparison of Japan's trade trends from Russia before and after the 2022 attack shows that total imports almost halved from USD 14.1 billion in 2021 to USD 7.4 billion in 2023. Of this, crude oil has fallen sharply from 5.24 million kilolitres (USD 2.3 billion) in 2021 to 120,000 kilolitres (USD 53 million) in 2023, and imports have been zero since March 2023. Natural gas (LNG), on the other hand, has decreased by 7% in terms of volume, from 6.57 million MT (≈ tonnes) (USD 3.4 billion) in 2021 to 6.13 million MT (USD 4.2 billion) in 2023, but has increased in terms of value.

 Here, imports from Russia of crude oil have been drastically reduced, potentially leading to a reduction in dependence on the Middle East and diversification of import sources, while imports of LNG, whose dependence on the Middle East is as low as around 10%, have not been reduced that much from Russia. This trend is not rational from the perspective of energy security. In this context, the logic of ‘sanctions’ prevails over the logic of ‘energy security’.

 In this paper, we will discuss the conflict between energy security and sanctions in Japan in detail, comparing the trade trends of energy resources between the EU and Russia.