Japan’s Russian Energy Dilemma

Japan has been one of Ukraine’s most consistent supporters in Asia since Russia’s full-scale invasion in February 2022. The island state condemned the war, aligned itself with the G7’s reactions, froze Russian assets and imposed export controls, and supported the ban on some Russian banks’ access to the SWIFT banking system.

Yet at the same time, Japan has kept a critical part of its energy relationship with Russia intact, most visibly for liquefied natural gas (LNG). Japan has taken a pragmatic course in which sanctions are politically supported, but they are neglected when national energy security, price stability, and industrial resilience are deemed more important.

Sanctions alongside energy ties

Tokyo sees Russia’s invasion not only as a European security crisis but also as a precedent that could weaken established frameworks against territorial conquest, especially when it comes to Taiwan. If Japan did not support Ukraine, it could not hope for an equal reaction from the West if a Chinese intervention in Taiwan were to cause grave global economic impacts.

But energy is a more complicated topic. Japan is a major LNG importer with very limited domestic fossil-fuel resources, and it has long treated diversification as a core principle of national energy security. The country meets around 70 per cent of its energy needs through imports. In particular, Tokyo seeks to reduce its exposure to Middle Eastern shipping choke points like the Suez Canal and diversify away from its main supplier, Australia. In that narrative, the Russian island of Sakhalin, with its oil and LNG infrastructure projects, Sakhalin-1 and Sakhalin-2, is very attractive. The island is geographically close to Japan, reducing transport risks, and its projects are integrated into the country’s long-term corporate planning for LNG deliveries, with current contracts running for another two to seven years.

This stance will not change under Japan’s new prime minister, Sanae Takaichi, whose party secured a convincing two-thirds majority in the parliamentary election on 8 February, solidifying her position. Last October, Takaichi even persuaded the nation’s most crucial partner, the US, not to ban Russian LNG imports, as doing so would weaken Japan.

The importance of Sakhalin

The Sakhalin projects show how geopolitical uncertainty translates into corporate and legal dismay. In 2022, Moscow created new Russian operators for key projects, forcing foreign stakeholders to reapply for their stakes. Japan’s Mitsui and Mitsubishi ultimately applied to retain their Sakhalin-2 holdings of 12.5 per cent and 10 per cent, respectively, following a directive from Tokyo that staying in the project served the national energy interest.

Sakhalin-2 matters because it cheaply supplies roughly 9 per cent of Japan’s LNG imports. This share is large enough to matter in volatile global LNG markets and to be secured against unforeseen national energy bottlenecks. For that reason, in December 2025, the US extended a waiver to its sanctions on Russia to allow certain services related to Sakhalin-2 to continue until June 2026. This move has been interpreted as enabling the project’s LNG to keep flowing to Japan. Part of the reason such exemptions exist is the structure of global LNG supply. The world has been short on gas and will remain so until a predicted rise in supply from 2027–28 onwards.

But these decisions come at a price. Purchases of Sakhalin oil and gas generate financial support for Russia that can be redirected into its war machinery and industrial sector. Russia’s operator changes also show that contracts and equity stakes can be made conditional on proven political loyalty.

Lessons for Japan, Russia, and the West

Japanese stakeholders have invested a lot in Sakhalin since the 1970s and have been reluctant to exit in ways that would simply hand over strategic assets to geopolitical rivals, notably China.

For Western sanctions policy, the lesson is tough. Energy sanctions are strong when alternatives exist and domestic costs are manageable. Otherwise, workarounds and pragmatism increase, even if support from Washington is necessary. Because Russian gas still moves through global markets, a coordinated shutdown could tighten an already fragile market and trigger price spikes.

For Japan, the Sakhalin case shows that national energy security is not only about diversifying suppliers but also about reducing the risks of losing long-term contracts. For Russia, the story is equally clear: even under heavy Western sanctions, parts of Russia’s export-oriented energy infrastructure can keep operating, especially when willing buyers from Asia cannot resist the low costs and quick delivery times and lack meaningful alternatives.

Japan’s post-election course may make this balancing act more deliberate. The likely scenario is not a break from Sakhalin LNG but tighter management of Russia-related risk. That means preserving current volumes while accelerating diversification and trying to ensure that future energy dependencies are harder to weaponise against Japan.

Timo Mohr is a PhD student at the Chair of Russia-Asia Studies at Ludwig Maximilian University of Munich. He focuses on contemporary energy relations between Russia and northeast Asian states. In 2025, he was a guest researcher at the Hokkaido University Arctic Research Center.