Japan bypasses Russian oil price cap – media – RT Business News

The February purchases were said to have been made above the price limit agreed by Tokyo and its Western allies

Japan bought Russian crude oil at $68.5 a barrel in February, the TASS news agency reported on Thursday, citing calculations based on statistics from Japan’s finance ministry.

The figure is higher than the $60 price cap that Tokyo agreed with its Western allies, in an effort to punish Russia for the conflict in Ukraine.

Last month, Japanese importers reportedly purchased 232,700 barrels of oil from Russia for a total value of 2.125 billion yen ($15.945 million). The average cost of a barrel of the February batch came in at $68.52, breaking the Western price cap for Japan-backed Russian oil.

The measure, which took effect in December, prohibits Western companies from providing insurance and other services to shipments of Russian crude unless the cargo is purchased at or below the set price. Another embargo banning almost all imports of Russian petrochemicals and introducing price limits on diesel and other petroleum products went into effect on February 5.

Tokyo has joined the price cap on Russian oil imports as part of a coordinated effort to reduce Moscow’s oil revenues. The plan was presented by Washington and supported by the G7, the EU and Australia. However, Japan excluded oil imports from the Sakhalin-2 LNG project from the cap, saying such a move would endanger the country’s energy security.

Sakhalin 2 supplies Japan with liquefied natural gas (LNG), which accounts for about 9% of Japan’s total LNG imports and 3% of its electricity supply.

In February, Japan Petroleum Association President Shunichi Kito said Tokyo could resume oil imports from the project if deemed necessary to ensure an uninterrupted supply of LNG. According to the Ministry of Economy, Sakhalin-2 may have to stop both production and liquefaction of natural gas if the site’s oil reservoirs fill up, which could happen if a suspension of shipments prevents the extraction of raw.

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