Japan makes an ‘anti-climax’, surges trade with Russia, thumbs-down to sanctions!

Photo courtesy: Twitter

By Haider Abbas

As this new year begins, nearing the completion of one year of war between Russia and Ukraine, there has come an anti-climax as it learnt that despite the sanctions on Russia, from West and US, there has been a great-surge of trade between Russia and Japan! Japan is a close ally of US and the guiding force behind Quadrilateral Dialogue, which has Australia, India and US in it. This QUAD is what is aimed primarily aimed against China, towards which Russia has extreme reservations.

But, what has come ‘to knock down US rhetoric’, in order to choke-down Russia under economic sanctions, has served a naught, and instead, Japan, a foremost US ‘close-ally’ from the last seven-decades, has cared-a-fig for US, and has gone ahead to jettison its trade with Russia- to an all time high. Russia is US worst enemy. The trade has soured stupendously which is yet again a signal that every nation, irrespective of its ideology or historical baggage, is solely driven by its own priorities and interests. The Japanese step is nothing short of a slap on its own Western partners.

What however is coming out of this Japan-Russia experiment, is that despite the heightened tensions and world scrutiny, the trade has peaked, which nonetheless tells the most outstanding fact, that instead on Russia on its knees, Russia has won over the West! Moscow has come unscathed in the most trying year-2022, as Russia based Tass 1 on January 2, has reported that an upscale of 10% increase in trade has been witnessed between the two. The report says, ‘trade turnover between Russia and Japan up 10% in 11M 2022 – statistics. According to the trade statistics of the Ministry of Finance of Japan, the main factor in the growth of trade turnover was the global increase in energy prices. The trade turnover between Russia and Japan surged by 10% year-on-year over eleven months of 2022 to 2.365 trillion yen (about $18 bln at the current exchange rate), according to TASS estimates based on the trade statistics released by the Japan’s Ministry of Finance. A global rise in energy prices has become the main growth driver for the trade turnover. As a result, Japan’s imports from Russia soared by 35% to 1.82 trillion yen (about $13.89 bln). Russia is one of main suppliers of liquefied natural gas to Japan and accounts for about 9% in total Japanese imports of this energy resource.’

It can be very well analyzed that the burgeoning trade was rightly-fully overseen by US but US just feigned ignorant about it, as after all, US too is much-reliant on Japan in its conflict with China, primarily over Taiwan. The sudden increase in Japan import of Russian energy products could happen, due to the volatility of Russian Global Energy market, available at much subsidized rates, from which of course, India too made a great profit. Russia and Japan jointly own Shakhalin Island Complex, which despite being disputed between Russia and Japan, was used to funnel the Russian Liquefied Petroleum Gas, and almost 9 % of the whole energy-imports of Japan are dependent on this route.

One by-product of oil is Shakhalin blend, which according to Reuters 2 is what is needed to be shipped out regularly for production to continue at Shakhalin Island Complex, and that, blocking it, was to have halted its gas-production. Moreover, Japan claims, that it would a would bear no consequences for the G-7 cap imposed on Russian oil. This oil-cap on Russia has been put into force on December 5, 2022, and Russia has vowed to not to supply its energy-products on any nation signatory to it. ‘ Shakhalin oil is exempted from it’, claims Japan, as per the same report. But, this is what Japan has made as a somersault. Japan had supported the G-7 cap on Russia yet it continues to maintain the ‘oil-harmony’ with Russia! The cap used by G-7 and European Union, at 60 USD per barrel, was a desperate attempt to make Russia reduce its oil production and its revenues, but the reality has come out to be starkly opposite to it! And, Japan has turned out to be the latest, on the list of beneficiaries, of the Russia oil. What goes without saying is that this ‘energy-materials’ from Russia, will give the much desired push to the Japanese international products, over their European rivals in the international market. May be we may learn it from South Korea in the same context.

Meanwhile, tensions are mounting on China-US front in the Indo-Pacific, where both the nations are engaged in eyeball to eyeball and US and China have got to ‘talk-each-other’ after China simulates an attack on US Navy warships, as US Secretary of State Antony Blinken and Chinese counterpart Qin Gang, held phone-talks, according to SCMP, on New Years Day, in which US stressed to maintain open-lines of communication. This happened just before Blinken left to visit China from Washington. Interestingly, it may also be known that Qin Gang is a trusted aide of Chinese President Xi Jinping and is also known for an acronym of a wolf-warrior, who has a hard-nose for Western nations and US, perceived as hostile to US. This has come within days, when on December 21, China vessel had specifically targeted a US Naval warship, and the Chinese warplane had nearly collided with US spy jet, with a distance of just 20 feet, which is a signal that China is now into a aggressive mould with US, and perhaps, the situation, right now is an all-time-high! The new theatre of war, is now the contested waters of South China-Sea, where both nations accuse each-of violation the international laws.

How the Ukraine war will benefit more nations, despite the imposed sanctions on Russia, showing a ‘Thumbs Down’ to US, is now all-out in the open. India too has benefited hugely from it. Will a new war will break over Taiwan? Between US and China is to be seen, but going by the trepid response US has shown vis-à-vis Ukraine over Russia, it does not seems that US is ready to take-up-the-cudgels, on behalf of Taiwan. How the new world is to unfold in the coming days is still to be seen? India which has grave concerns over China, is watching every precarious move by a very close-eye.


The writer is a former UP State Information Commissioner and writes on international issues .



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