Invasion of Ukraine: US Bans Russian Oil Imports; Japan and Europe Should Follow

As the Russian invasion of Ukraine continues, America has decided to prohibit the import of Russian crude oil and natural gas. Britain, too, has announced that it will halt imports by the end of the year.

Russia is the world’s second-largest exporter of crude oil and the largest exporter of natural gas. Half the Russian government’s yearly income comes from these exports.

The U.S., Europe and Japan have already cut off Russian banks’ access to the international payment network and frozen the Russian central bank’s assets.

Experts, however, have pointed out that “unless energy income, Russia’s largest source of capital, is cut off, the effect of the sanctions will be insufficient.”* U.S. President Joe Biden emphasized the importance of the ban on oil imports, saying he was “targeting the main artery of Russia’s economy.”

Despite increasing criticism from the international community, Russia has increased the severity of its attacks on Ukraine. It is essential that the international community ratchet up the pressure on Russia.

Japan and Europe, however, decided against an immediate ban on imports. Unlike America and Britain, which are oil-producing countries, the rest of Europe relies on Russia for 30-40% of its oil and gas. That Japan relies entirely on imports of fossil fuels to meet its energy needs is a weakness.

If imports continue as normal, however, there is no doubt that they will create a loophole in the international sanctions regime. There is concern that, in retaliation for the American and British measures, Russia will cut off gas supplies to the rest of the world. Japan and Europe must also start preparations to end their dependence on Russian energy.

Through diversifying its suppliers and introducing more sustainable energy sources, Europe is planning to end its dependence on Russia by 2030. It hopes to cut imports of Russian gas by one-third before the year’s end.

Japan must also clarify its own strategy. The majority of Japan’s Russian imports originate from the Sakhalin I and II projects in far eastern Russia, which both the Japanese government and private sector have invested in. In addition to cutting off this supply, it will probably be necessary to consider freezing the project altogether.

Oil and gas prices have been high since the end of last year, amid increased demand because of the restarting of economic activity following the easing of the COVID-19 pandemic. There is concern that cutting off Russian oil and gas supplies could have a critical impact on the economic well-being of everyday people.

America, Europe and Japan must assume that this will be the case, and prepare the necessary conditions to be able to maintain pressure on Russia.

First, we must work with oil-producing countries in the Middle East to encourage an increase in production. At the same time, we must release strategic oil reserves, work to create a framework for the flexible lending of natural gas between countries and promote the conservation of energy. The international community must cooperate in every field.

*Editor’s Note: This quote, accurately translated, could not be verified.