Japanese Government Eyes Sakhalin-2 Crude Oil Imports

The Japanese government is assessing whether major oil refiners will by crude from the Sakhalin-2 gas and oil project as oil needs to be regularly shipped out for production to continue, sources told Reuters.

• "The government is sounding out top refiners to buy oil from the Sakhalin-2 to make sure LNG supply from the project can continue," one of the sources, a senior industry official, told Reuters.
• The government's move signals a potential restart of Russian oil imports by Japan for the first time since June
• The Sakhalin Island complex is vital to Japan's energy security as it accounts for 9% of the country's LNG imports and blocking the international purchase of Sakhalin-2 oil would hinder the production of natural gas.
• Sakhalin Blend crude exports have fallen to three cargoes per month between October and December, down from five per month before the Ukraine war, Refinitiv data showed.
• "We are consulting with refiners to see if they could buy the Sakhalin-2 oil while asking the refiners which had been buying the oil before Russian invasion of Ukraine to continue purchasing," a source told Reuters.
• Russia has been questioning Japan’s Sakhalin supply, because of Tokyo’s support of the oil price cap despite the exclusion of crude oil from the Sakhalin-2 plant.