Japan, US to Coordinate in Setting Caps on Russian Oil Prices: Official

Japan's Prime Minister Fumio Kishida on the first day of the three-day G-7 summit at Schloss Elmau, Germany on June 26, 2022. Sean Gallup/Pool/Getty Images

Japan has agreed to coordinate with the United States in setting a price cap on Russian oil exports to pressure Moscow to halt its aggression against Ukraine, according to a Japanese official.

Japan’s Prime Minister Fumio Kishida met with U.S. President Joe Biden on the sidelines of the Group of Seven (G-7) summit on June 26 and agreed on the importance of setting a price cap on Russian oil, The Asahi Shimbun reported, citing an unnamed official.

Kishida told reporters on June 28 that the G-7 leaders have decided to consider imposing a price cap on Russian oil while ensuring market stability.

G-7 leaders from the United States, Canada, Germany, Italy, Japan, and the European Union (EU) said June 28 that they would explore imposing a cap on Russian oil prices to “prevent Russia from profiting from its war of aggression.”

“We welcome the decision of the European Union to explore with international partners ways to curb rising energy prices, including the feasibility of introducing temporary import price caps where appropriate,” the G-7 leaders said in a communique.

U.S. President Joe Biden, German Chancellor Olaf Scholz, Canadian Prime Minister Justin Trudeau, Italian Prime Minister Mario Draghi, European Council President Charles Michel, President of the European Commission Ursula von der Leyen, Japanese Prime Minister Fumio Kishida, and British Prime Minister Boris Johnson during the G-7 summit in Germany on June 28, 2022. Brendan Smialowski/AFP via Getty Images

Among options under consideration include “a possible comprehensive prohibition of all services” that are linked to the transportation of Russian seaborne crude oil and petroleum products globally.

This is “unless the oil is purchased at or below a price to be agreed in consultation with international partners,” according to the communique.

“We invite all like-minded countries to consider joining us in our actions.”

Russian Oil and Fuel Revenue Increase

The United States and the EU have sanctioned Russia and banned imports of Russian oil since its invasion of Ukraine in February. While these had led to a decline in Russian export volumes, Russian revenues increased last month because of higher crude oil and fuel prices.

“With higher crude oil and product prices globally, Russian oil export revenues are estimated to have increased by $1.7 billion in May to about $20 billion,” the International Energy Agency stated in its June report.

Despite the bans, the EU remained the main destination for Russian exports last month, making up 43 percent of Russian flows, followed by just over a quarter to China.

Kishida said earlier this month that Japan will “take time” to phase out Russian oil imports since the country is heavily dependent on imports. Russian oil imports accounted for about 33 million barrels of Japan’s overall oil imports, or 4 percent, for 2021.

“As for the timing of the reduction or stoppage of [Russian] oil imports, we will consider it while gauging the actual situation,” he told reporters.

Reuters contributed to this report.