Japan’s top refiners have said they will stop importing Russian crude, joining a growing list of energy companies shunning the country’s oil following its invasion of Ukraine.
Eneos Holdings Inc., Japan’s biggest refiner, hasn’t signed new contracts for Russian crude since the war began, Chief Executive Officer Tsutomu Sugimori said in Tokyo on Tuesday, March 22. Its closest domestic rival, Idemitsu Kosan Co., said Wednesday (March 23) it won’t strike new deals for Russian oil.
The retreat comes as energy giants worldwide slash their dependence on Russian fuels. TotalEnergies SE said Tuesday (March 22) it will stop buying crude and diesel from the country by the end of the year, while Shell PLC plans to phase out all purchases of Russian oil and gas. Breaking ties is particularly challenging for Japan, which imports almost all of its fossil fuels and has already been grappling with soaring commodities prices.
Sugimori warned oil prices could rise further if countries hit Russia with harsher sanctions. Oil has rallied more than 50% this year, hitting its highest level since 2008 earlier this month.
Eneos will procure alternative crude supplies from the Middle East to fill the gap, Sugimori said. Russian oil covered by contracts signed before the invasion will continue to be shipped to Japan until around April, he said.
Idemitsu said it’s suspending Russian imports due to concern over disruption to payments and logistics. The decision won’t affect the stable supply of its oil products, since Russian crude made up only 4% of its purchases between last April and November, a company spokesperson said by phone.
Cosmo Energy Holdings Co., Japan’s third-biggest refiner, doesn’t currently buy Russian crude oil and doesn’t have any plans to procure the fuel, a company spokesperson said.