26.07.2022 Author: Vladimir Danilov

Japan Faces Catastrophic Consequences of its anti-Russian Sanctions


While the US and its allies in their Russophobic frenzy are actively discussing tougher anti-Russian sanctions and, in particular, the possibility of limiting the price of Russian oil, the said Western sanctions policy is doing more and more damage to the Western countries themselves. And this is already particularly evident in the global energy market, especially the gas market.

Back in the spring, the United States initiated a gas war with Russia and guaranteed that the EU would get rid of so-called “energy dependence on Moscow” and secure LNG supplies at levels comparable to those of Russia. In reality, however, not only has the US proved completely incapable of doing so in recent days, but it has also severely undermined the EU’s own energy security. Recently vying with Qatar and Australia for the top spot among the world’s LNG exporters, the US has lost ground sharply due to a string of unexplained accidents at US plants supplying mainly European consumers with the “blue fuel.”

As is well known, US LNG producers’ troubles began in early June with an explosion at the Freepor terminal on Quintana Island in Texas, which accounted for about 20% of US gas processing for export. However, while the first comments by the owners of the complex and the rescue services referred to a “small three-week” repair, this was shortly followed by claims of a much longer remedial work.

Exactly one month later, a similar OneOk facility in Medford, Oklahoma, seized its operation for similar reasons. According to eyewitnesses, the flames that engulfed the industrial plants were so widespread that it was no longer a question of short-term repairs, but of the impossibility of continuing to operate the production units, which had “burned out completely.”

The accident in Oklahoma occurred almost simultaneously with a major accident in Mont Belvieu, Texas. There, an underground pipeline explosion and subsequent fire severely damaged Lone Star’s liquefied natural gas storage facility.

As a result, according to the US authorities, further commissioning of most of the affected production facilities in the US has already been postponed until the end of the year because, in addition to the serious labor costs of the repair tasks, significant investments will be needed. And the owners of the destroyed plants are likely to turn to the national government for them.

The global energy market losses due to the closure of these US plants are significant and will clearly be particularly felt in the coming heating season for both domestic and foreign fuel consumers. However, it should be emphasized that as a result of Washington’s anti-Russian policy, aimed, among other things, at substituting previously proven Russian energy supplies for US ones, since May Europe has become the main recipient of US LNG, becoming energy dependent on the US, with the Old World accounting for two-thirds of total liquefied fuel exports. As a consequence, the energy situation in EU countries that relied on fuel from US producers as a result of the anti-Russian sanctions policy is dramatically worsening. But it has also entailed instability in the energy market elsewhere in the world, particularly in Asia, which will now have to increase competition for gas with Europe.

These “disastrous” consequences of US sanctions on the global energy market were recently highlighted by Yahoo News Japan, recalling that they were exactly what Russian President Vladimir Putin had earlier warned about when trying to curb the Russophobic policy unleashed by the US and its Western allies. In particular, Putin stressed that Moscow was ready to respond to any anti-Russian sanctions, which in the meantime would do far more damage to the West than to Russia itself. In confirmation of Putin’s predictions, Yahoo News Japan notes the likelihood that the eurozone economy will fall into recession in the next 12 months due to anti-Russian sanctions, as it is already at 45% and inflation is expected to be 7.6%.

Amid a trend for EU countries to reduce pipeline gas imports and replace them with liquefied natural gas (LNG), whose production volumes are unlikely to increase significantly, Japanese energy experts believe that competition in the LNG market will only intensify in the coming months and years. In the short term, the situation will also worsen due to expected power shortages in China, where the policy of increasing coal production has failed.

In this context, Japan’s energy security expectations are unintentionally pinned on Russia. However, the recent announcement by the Deputy Chairman of the Security Council of the Russian Federation, Dmitry Medvedev, that Japan, which has taken an openly Russophobic course under US influence, would not be able to buy Russian gas if it implemented a policy of restricting the price of Russian oil, makes Tokyo’s thoughts not very bright. Japan’s fears have also intensified, Kyodo reported on July 1, over the possibility that Japanese corporations could lose their rights in the Sakhalin-2 project as a result of Russia’s decision to make a Russian LLC the operator of that liquefied natural gas (LNG) project.

Commenting on the request made by Japanese Minister of Economy, Trade and Industry Koichi Hagiuda at the Energy Forum in Sydney for the US and Australia to increase liquefied natural gas production, Noriaki Oba, analyst and founder of the Japan Post Oil Strategy Institute, said it was unlikely the two countries could do so.

With this in mind, Japanese Minister of Economy, Trade and Industry Koichi Hagiuda said Japan’s Mitsui and Mitsubishi should “firmly hold on” to their stake in the Sakhalin-2 project. After meeting with Prime Minister Fumio Kishida on July 16, Hagiuda stressed that Tokyo asked these Japanese companies to remain shareholders in Sakhalin-2 after the new Russian company becomes the operator of the project, despite the opinion expressed by Nikkei that the Japanese companies’ further decision will depend on Russian conditions.

As for Moscow’s attitude towards Tokyo in the current circumstances, including the demonstratively Russophobic behavior of Japanese Foreign Minister Yoshimasa Hayashi at the recent G20 event, dialogue becomes very problematic under these circumstances. Japan’s extremely unfriendly stance on Russia is not conducive to cooperation and energy dialogue, Russian Presidential Spokesman Dmitry Peskov said on July 6:

“Japan is taking an extremely unfriendly stance towards the Russian Federation. And in any case, such an extremely unfriendly stance is not at all conducive to the development of trade and economic relations, which include the energy dialogue as well.”

Vladimir Danilov, political observer, exclusively for the online magazine “New Eastern Outlook”.


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