BY JOHN VAROLI
With global oil and gas markets in their third month of crisis due to war in the Middle East, and with no end in sight as the warring parties show little sign of compromise, G-7 countries have been making cautious overtures to Russia in a hope to help stabilize supplies of crude oil. These efforts are opening opportunities for Japanese companies.
In early March, the White House issued a temporary sanctions waiver allowing countries to purchase Russian oil and petroleum products already at sea to help steady global energy markets. That exemption expired May 16 when the White House failed to renew it.
In early May, Taiyo Oil and Idemitsu Kosan resumed purchases of oil from Russia’s Far
East, from the Sakhalin-2 project not far from Japanese shores. Then on May 9, the Ministry of Economy, Trade and Industry (METI) said a delegation from Tokyo plans to visit Moscow in coming weeks to discuss business relations. Even if largely technical in nature, the meeting would represent the clearest sign yet of a limited thaw in JapanRussia economic relations since Moscow invaded Ukraine in early 2022.
Geography remains one of the central realities shaping Japan’s energy policy. Resourcerich Russia sits directly to Japan’s north – its closest neighbor, while Tokyo remains heavily dependent on imported fossil fuels for energy security. In purely economic terms, deeper energy cooperation between the two countries would appear logical.
Politics, however, has consistently complicated that logic.
Japan and Russia have never formally signed a peace treaty following the Second World War, due to the long-running territorial dispute over the islands Russia calls the Kurils and Japan refers to as the Northern Territories. More importantly, Japan’s security alliance with the U.S. closely constrains Tokyo’s room for maneuver on Russian policy.
For Washington, with abundant domestic oil and gas resources, energy security is a strategic advantage. For Japan, which imports more than 80% of its primary energy, it remains a structural vulnerability.
As a result, Tokyo has often pursued a more pragmatic approach behind the scenes, seeking exemptions or preferential treatment for projects considered critical to national energy security, particularly Sakhalin-2 LNG exports.
Russia, meanwhile, also has incentives to diversify its customer base. China and India now dominate purchases of Russian crude, allowing both countries to negotiate steep discounts given Moscow’s limited alternative export options. Expanding sales to Japan would modestly strengthen Russia’s bargaining position in Asian energy markets.