Japan joins the EU in cutting the price cap on purchases of Russian oil to $47.60 per barrel, in a move effective Friday and aimed at punishing Russia over the war in Ukraine, yet unlikely to affect any Japanese purchases.
Japan lowered the price cap from the $60 per barrel imposed by the G7 years ago, to $47.60 a barrel. Japan is also imposing fresh export sanctions on Russian firms and additional asset freezes, as part of its efforts to help the international push to end the war in Ukraine, chief cabinet secretary Yoshimasa Hayashi said at a regular news briefing on Friday, as carried by Reuters.
The Japanese move follows the EU’s price cap cut from July, when the European Union lowered the price cap on Russian crude oil to $47.60 from $60 per barrel as it adopted the 18th sanctions package against Russia, targeting a hundred more ‘shadow fleet’ tankers, energy trade, and traders and banks enabling it.
The 18th sanctions package seeks to curtail Russia’s energy revenues, with the lower price cap “to align it with current global oil prices,” the EU said.
The price cap mechanism set by the G7 and the EU says that Russian crude shipments to third countries can use Western insurance and financing if cargoes are sold at or below a certain ceiling, which is now $47.60 per barrel for the EU and Japan.
Japan’s imports of Russian oil, which have accounted for a tiny 0.1% share so far this year, would not be affected as the Asian economy imports oil from the by-product from the Sakhalin-2 project, which is exempted from the price cap rule. Japan gets about 9% of its LNG from Sakhalin-2.
The fresh Japanese sanctions on Russia come as U.S. President Donald Trump has reportedly urged U.S. partner countries in the G7 group to impose tariffs on China and India in punishment for their continued energy trade with Russia.
By Michael Kern for Oilprice.com
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