Japan already had a significant energy import bill as it depends on foreign oil and gas for 90 percent of its needs. But as the yen fell to a 20-year low, Japan’s bill got even bigger, with the price of crude rising roughly 40% in dollar terms since early 2022 to a whopping 70% in yen terms. “A confluence of factors, including the highest fuel prices since the war and a falling currency, is putting significant pressure on Japan’s energy security, making this one of the most severe energy crises Japan has faced,” said Jane Nakano, senior partner. at the Washington-based Center for Strategic & International Studies think tank. Because of its extreme dependence on imported energy, Japan has had to continue importing Russian oil and natural gas despite its verbal commitment to sanctions against Moscow. Recently, the head of one of the largest shipping companies in Asia, Mitsui OSK Lines, said that Japan has no choice but to continue importing Russian LNG, citing the country’s nuclear power plants that are still offline after the tragedy Fukushima and rising energy prices. “We cannot use many nuclear power plants, so the supply and demand balance of the electricity industry is quite tight,” Takeshi Hashimoto told the Financial Times earlier this month. “Today, the spot market for both LNG and coal is quite expensive. This is one of the reasons why Japan is so reluctant to stop LNG imports from Russia.” It could be because of its heavy energy import bill that Japan proposed to the G7 to cut Russian oil export prices to half the current rate. By Charles Kennedy for Oilprice.com More top reads from Oilprice.com:
