Editorial: As the United States imposes an embargo on Russian oil, Japan and Europe must think about a strategy
As Russia continues its invasion of Ukraine, the United States has decided to impose an embargo on Russian crude oil and natural gas. The UK will also stop importing Russian oil by the end of 2022.
For Russia, which is the world’s second largest exporter of crude oil and the largest exporter of natural gas, the combined revenues of the two make up half of the government’s annual revenue.
The United States, Europe and Japan have so far imposed sanctions such as blocking Russian banks from the SWIFT global banking settlement network and freezing assets belonging to the Russian central bank.
But experts have said that unless the world shuts down Russia’s biggest source of funding – energy revenue – the effects of the sanctions will be insufficient. US President Joe Biden stressed the importance of the embargo, saying it “targets the main artery of Russia’s economy”.
Despite mounting criticism from the international community, Russia has stepped up its attacks on Ukraine. It is vital that we step up the anti-Russian pressure.
Unlike oil states like the US and UK, other European countries buy 30-40% of their crude oil and gas from Russia. Japan is particularly vulnerable as it acquires all of its fossil fuels from imports. Consequently, Japan and other European countries postponed their decision to impose embargoes on Russian oil and gas.
But if countries continue to import oil and gas from Russia as usual, it could very well create a loophole in international sanctions. It is also possible that in retaliation for the US and UK embargoes, Russia will stop supplying oil and gas to the rest of the world. Japan and Europe must prepare to no longer depend on Russia.
Through supplier diversification and wider adoption of renewables, Europe plans to establish a system that is not dependent on Russia by 2030. For now, however, it will aim to reduce the amount of Russian gas it acquires at one-third of the current amount by the end of 2022.
Japan, too, should explicitly state a strategy. Imported oil from Sakhalin 1 and Sakhalin 2, resource development projects in the Far East funded by both the public and private sectors, constitutes a large portion of imports from Russia. At the same time as the reduction in the amount obtained from these projects, the freezing of the programs themselves will have to be considered.
Since 2021, when economic activity picked up amid the coronavirus pandemic, crude oil and gas prices have soared. There are fears that if Japan goes ahead with excluding Russian oil and gas, it could have serious repercussions on the daily lives of the Japanese public.
The United States, Europe and Japan should anticipate such circumstances and prepare an environment in which anti-Russian pressure can be maintained.
First, we should encourage oil-producing states in the Middle East to produce more oil. At the same time, a mechanism should be created to enable the release of national oil stocks and the flexible accommodation of natural gas between countries, and to advance energy conservation. Collaboration is needed in a wide range of areas.