Asian importers of Russian oil have been swapped after Russian President Vladimir Putin said the 'unfriendly' country should pay Russian oil prices in rubles in a recent shock to the global economy following the invasion of Russia. Ukraine by Moscow.
Japan, South Korea and Taiwan are on the list of least popular countries. They all export liquefied natural gas (LNG) from the Sakhalin-2 and Yamal LNG projects in eastern Russia.
Putin said on Wednesday that Russia, calling for "special military" action in Ukraine, would continue to supply oil at a price and price specified in the agreement, but that he would have to pay in Russian rubles.
Japan, Asia's largest supplier of Russian LNG, does not know how Russia will handle this demand. Chief Financial Officer Shunichi Suzuki said in a government statement: "We are reviewing the current situation with hard work as we do not fully understand what [Russia's] objective is and what they are going to do."
According to data published by Refinitiv, Japan imported 6.84 million tonnes of LNG from Russia in 2021, which represents almost 9% of LNG imports.
Japan's largest LNG buyer, JERA, has not received a report from Sakhalin Energy, a joint venture operator that operates Sakhalin-2, to change its payment to US dollars, the company said. The spokesperson added that the country's largest electricity company will continue to collect data.
According to Japan Oil, Gas and Japan, JERA, the thermal and petroleum joint venture between Tokyo Electric Power Company Holdings and Chubu Electric Power, will purchase about 2 million tons of LNG per year through the Sakhalin-2 project under a long-term commitment. Data from Metals National Corporation (JOGMEC). Tokyo Gas and Osaka Gas, the largest Japanese exporters in the region, also confirmed details of the ruble requirement, a company expert said on Thursday.
Tokyo Gas, one of Japan's biggest LNG buyers, declined to comment on the terms of a long-term deal with Sakhalin Energy for 1.1 million tonnes, including the currency it could use for the payment.
Sakhalin Energy is 50% owned by Russia's Gazprom, 27.5% by Shell, and the rest is owned by Japanese trading companies Mitsui & Co and Mitsubishi Corp. Shell announced on February 28 that the project and the Japanese government would ban the project. Shell said it had no impact on Japan's energy exports.
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South Korea, Asia's third-largest supplier of Russian LNG, is expected to grow and the Financial Council said it would do everything possible to boost the market. .
The Korean Gas Corporation (KOGAS) said it exported around 2 million tonnes of Russian LNG, accounting for 6% of the company's revenue. However, KOGAS said it did not directly affect Russia as it had a purchase agreement with Sakhalin Energy and oil from a Japanese bank in Singapore.
A KOGAS employee said, "We don't see any problem at the moment because we are paying the Japanese banks that are affected."
The Taiwan Chamber of Commerce told CPC Corp that Russia's oil exports arrived at the end of this month. "There is no news that the payment will be adjusted," they said.
The demand for ruble payments was seen as Putin's support for the ruble, which disappeared after the sanctions against Russia.
Putin said he would take the government and the central bank a week to resolve the switch to Russian currency, and he would ask Gazprom to change the deal.
But Eswar Prasad, a business law professor at Cornell University, said the move would not work for Moscow.
“Foreigners may find it difficult to access the ruble non-illegally, but they will be willing to pay Russian exports at lower rates,” Prasad said. He added that accepting the ruble would do little for Russia to get the hard currency it needed to control the value of its currency in world markets or to pay for other countries' exports.