Russia-Japan bilateral trade augments given international sanctions -

Tokyo/Moscow: It has surfaced that an increase in trade between Russia and Japan has occurred, given the sanctions imposed by the G7, a group of advanced countries in the world, and other western countries. In the first 11 months of 2022, trade between the two countries has reached a whopping $18 billion. It was revealed that the increase in fuel prices and fuel exports were the reasons behind this increase. Japanese companies have invested in Russia’s Sakhalin gas project and the Japanese government has instructed its insurance companies to provide insurance facilities to LNG tankers.

After the Russia-Ukraine conflict began, the West imposed massive sanctions against Russia. Countries like Japan and Australia also participated in this. Japan is a part of the ‘G7’ group and this group took the initiative to impose restrictions on Russia’s fuel and financial sectors. The G7 also approved the proposal to control Russian fuel prices for the first time. There are also claims that demand for Russian fuel has decreased somewhat due to these sanctions. The news of increased trade between Russia and Japan is surprising, given this background.

In the first 11 months of 2022, trade between Russia and Japan has reached $18 billion. The share of fuel exports from Russia is the highest in this. Russia has exported fuel worth nearly $14 billion to Japan. It includes crude oil and natural gas. Russian fuel accounts for nine per cent of Japan’s fuel imports. Three per cent of Japan’s energy production depends on Russian gas. Therefore, despite the sanctions imposed by the G7, Japan has continued to import Russian gas.

Moreover, Japanese companies have a partnership with Russia’s Sakhalin oil project and Japan has also maintained this investment. At the same time, there have been reports that Japanese companies have been instructed to provide war insurance for ships importing Russian fuel. As the import of fuel is a priority for the Japanese government, it is said that the Japanese government has sent a letter to the concerned companies asking the Japanese companies to maintain the war insurance facility. Three companies in Japan provide insurance for fuel-importing vessels. It includes ‘Tokio Marine & Nichido Fire Insurance Co., Ltd’, ‘Sompo Japan Insurance’ and ‘Mitsui Sumitomo Insurance’.

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