Japan quietly resumes Russian oil imports as Hormuz crisis forces a pragmatic rethink

paralysed global energy supply chains in March, in a move that illustrates both the depth of Tokyo's long-term stake in Russia's Far East energy projects and the speed with which geopolitical calculations shift when 95% of a country's oil imports are cut off at source.

A tanker carrying Sakhalin Blend crude, produced as part of the Sakhalin-2 liquefied natural gas development project, arrived at Imabari on Japan's western coast on May 4, according to TV Tokyo, the Asahi Shimbun and other Japanese media. Refiner Taiyo Oil, which received the cargo at the request of Japan's Ministry of Economy, Trade and Industry, plans to process it into gasoline, naphtha and other petroleum products.

The purchase marks Japan's first Russian crude import since June 2025 — itself an intermittent resumption after Tokyo largely suspended Russian oil purchases following Russia's 2022 invasion of Ukraine. Japan, which imported 94% of its crude from the Middle East in 2025, is among the hardest-hit economies from the Hormuz closure.

The Sakhalin exception

The transaction is possible because of a legal architecture that Japan quietly preserved at considerable diplomatic cost. When G7 sanctions were imposed on Moscow in 2022, Tokyo made a calculated decision not to divest from Sakhalin-1 and Sakhalin-2 — two projects in Russia's Far East in which Japanese companies hold significant stakes. Mitsui (TYO: 8031) holds a 12.5% stake in Sakhalin-2, alongside Mitsubishi (TYO: 8058) at 10%, with the remaining majority held by Russia's Gazprom (MOEX: GAZP) after Shell departed in 2022.

The Japanese government's justification was dual: that withdrawing from Sakhalin would simply transfer the assets to Chinese or Indian buyers — eliminating Japanese influence without reducing Russian revenues — and that the LNG produced by Sakhalin-2 is integral to Japan's domestic gas supply, with Russian LNG accounting for approximately 8.8% of Japan's total imports. Japan's Ministry of Economy, Trade and Industry has consistently described Sakhalin energy as vital to reducing dependence on Middle Eastern imports and of the Asian countries impacted by the closure of the Strait of Hormuz, Japan is one of the least exposed.

The Sakhalin-2 project is not subject to the Western sanctions imposed after Russia's invasion of Ukraine, and the United States has extended Japan's exemption for purchases from the project several times. The current US permit for sales from Sakhalin-2 expires in June — a deadline that adds urgency to Tokyo's current purchases and creates a forthcoming diplomatic inflection point.

From embarrassment to vindication

The decision to retain the Sakhalin stakes was controversial within Japan and prompted criticism from some G7 partners. It now looks like one of the most practically farsighted energy policy decisions of the post-2022 period. Japan had said in March that it would "consider" whether to buy Russian crude after the US issued its sanctions waiver, framing the decision as use of an existing exemption rather than a departure from sanctions policy.

Japan's Prime Minister Sanae Takaichi, speaking in Canberra on May 4 after talks with Australian Prime Minister Anthony Albanese, said the global oil supply squeeze was inflicting "enormous impact" on the Asia-Pacific region and that Japan and Australia would respond urgently to secure stable energy supplies. Takaichi said Tokyo expected to have enough naphtha-derived chemical products to last beyond the end of the year after boosting imports from outside the Middle East.

The Imabari cargo is understood to be relatively small— the June 2025 purchase by the same company amounted to approximately 600,000 barrels, less than 1% of Japan's monthly oil consumption. But its strategic significance is disproportionate to its volume: it demonstrates that the Sakhalin supply chain remains operational, that the US exemption is being actively used, and that Japan has a viable non-Middle Eastern, non-American alternative that other sanctioning countries — including South Korea — conspicuously lack.

Washington's ambivalence

The US position on the purchase is complicated. Treasury Secretary Scott Bessent said after a meeting with Japan's finance minister that the White House expects Japan to stop importing Russian energy — a statement that sits awkwardly alongside the very exemption that his office has made possible. The tension reflects a broader inconsistency in the US approach to Russian energy sanctions, where the White House has flip flopped on insisting on Russian sanctions then issuing waivers — including for India, Hungary, Turkey and Slovakia for gas — to keep oil prices down.

Japan's broader response to the Hormuz crisis has included accelerated purchases from the United States and diversified naphtha imports from non-Middle Eastern suppliers. The Sakhalin cargo is one element of a multi-front supply diversification — but it is the element that requires the most delicate political management, given Russia's continued war against Ukraine and Japan's formal alignment with the G7 sanctions coalition.

The Carnegie Endowment's analysis of Japan-Russia oil projects has noted the fundamental dilemma Tokyo faces: it cannot abandon Sakhalin without either losing the assets to China or India, or losing the LNG supply that the projects provide — neither of which serves Japanese interests.