As Russia continues its invasion of Ukraine, the United States decided to impose an embargo on Russian crude oil and natural gas. The United Kingdom 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 top exporter of natural gas, the revenues of both combined make up half of annual government revenue.
The U.S., Europe and Japan have until now imposed sanctions such as blocking Russian banks from the SWIFT global bank settlement network and freezing assets belonging to the Russian central bank.
But experts have said that unless the world shuts off Russia’s biggest source of funds — energy revenue — the effects of sanctions would be insufficient. U.S. President Joe Biden stressed the significance of the embargo, saying that it was “targeting the main artery of the Russian economy.”
Despite the international community’s heightening criticism, Russia has escalated its attacks on Ukraine. It is vital that we strengthen anti-Russian pressure.
Unlike oil states such as the U.S. and the U.K., other European countries acquire 30 to 40% of their crude oil and gas from Russia. Japan is particularly vulnerable in that it acquires all of its fossil fuels from imports. Hence, Japan and other European countries deferred their decision to impose embargoes on Russian oil and gas.
But if countries continue to import oil and gas from Russia as usual, it may very well create a loophole in international sanctions. There is also the possibility that as a retaliatory measure against the U.S. and U.K. embargoes, Russia may stop supplying oil and gas to the rest of the world. Japan and Europe must prepare themselves to stop relying on Russia.
Through the diversification of suppliers and the expanded adoption of renewable energy, Europe plans to establish a system that does not depend on Russia by 2030. For the time being, however, it will aim to reduce the amount of Russian gas that it acquires to one-third of the current amount by the end of 2022.
Japan, too, should explicitly indicate a strategy. Oil imported from Sakhalin 1 and Sakhalin 2, resource development projects in the Far East funded by both the public and private sectors, make up a large portion of imports from Russia. Along with decreasing the amount that is procured from these projects, the freezing of the schemes themselves will have to be considered.
Since 2021, when economic activity resumed amid the coronavirus pandemic, crude oil and gas prices have skyrocketed. There are concerns that if Japan goes ahead with the exclusion of Russian oil and gas, it could have serious impacts on the Japanese public’s everyday lives.
The U.S., Europe and Japan should predict such circumstances, and prepare an environment in which anti-Russian pressure can be maintained.
Firstly, we should encourage oil producing states in the Middle East to produce more oil. At the same time, a mechanism should be created to allow for the release of national stockpiles of oil and the flexible accommodation of natural gas among countries, and push forth energy conservation. Collaboration is necessary in a wide range of areas.