FX.co ★ Japan depends on Russia for its natural gas needs

In Japan, there is no single opinion on whether the country will be able to phase our Russian natural gas and oil completely. Local authorities are trying to foresee every possible scenario and understand the necessity of such a decision. Yet, some businesses in the country do not share the government’s optimism on the matter.

Takeshi Hashimoto, the president at Mitsui Osk Lines Ltd., is one of those who do not believe in possible alternatives to Russian natural gas. He firmly believes that Japan cannot do without Russian commodities at this point in time. He says that the natural gas, which Japan buys at a relatively cheap price from Russia under long-term contracts is needed to meet the country’s basic electricity needs.

One of the reasons why Japan is unwilling to cut Russian LNG supplies is due to high prices in the spot market.

Following Japan’s proposal to cap the price of Russian oil, Dmitry Medvedev, the deputy chairman of the Security Council of Russia, said oil prices could go higher than the predicted astronomical price of above $300-$400 a barrel.