Japan Warns High Energy Prices Will Stay Due To Ukraine War

According to Japan's annual energy report released Tuesday, uncertainty about global energy supplies, exacerbated by Russia's invasion of Ukraine, might keep energy prices high for a time, Mainichi Japan reported.

Photo Insert: According to the analysis, the rise in energy prices has intensified since Russia's invasion of Ukraine in late February.

Despite a slew of sanctions Tokyo has imposed on Moscow, the latest white paper on energy emphasized the importance of Japan maintaining interests in oil and gas projects on the Russian Far East Island of Sakhalin, saying that they are necessary to secure a stable energy supply for the energy-poor country at a reasonable cost.

The fiscal year from March 2022 to March 2023 was defined in the report as a time when the globe faced fundamental problems, with the prospect that a prolonged war in Ukraine and new investments in decarbonization efforts would drive up energy costs.

"The priority for the Japanese economy is to improve energy productivity while containing energy import prices (at a certain level) through efforts such as diversifying energy sources and suppliers," according to the research.

The white paper listed extreme weather, such as a cold snap in Europe, natural disasters, and a lack of investment in developing fossil energy sources at a time when the economy is recovering from the coronavirus epidemic as the key causes causing an increase in fossil fuel prices.

According to the analysis, the rise in energy prices has intensified since Russia's invasion of Ukraine in late February. The study made plain Tokyo's intention to stay in two major energy projects off the coast of Russia, known as the Sakhalin 1 and 2 oil and liquefied natural gas projects, located north of the Japanese archipelago.

According to the white paper, Russian oil and LNG imports account for 3.6 percent and 8.8 percent of total oil and LNG imports, respectively, and the country buys 91.7 percent of its oil from the Middle East.

The Sakhalin 2 project is "indispensable" for energy generation in Japan, according to the research, which notes that LNG imports from the project account for about 3% of total electricity generation in Japan.

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