Japan weighs energy security against US pressure on Sakhalin-II LNG

September 15, 2026 at 07:08 PM2 min

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Japan continues to resist US pressure to phase out Russian LNG imports from Sakhalin-II, citing energy security. The Takaichi government calls Russian LNG 'extremely important' as households face a 40% electricity price surge forecast for H2 2026. Tokyo's sanctions waiver was extended to end-2026, but Washington's patience may run out.

Key Facts

Japan imports 5 million tonnes of LNG annually from Russia's Sakhalin-II project, accounting for 9% of its total LNG imports.
The International Energy Agency forecasts Japanese electricity prices to surge 40% year-on-year in H2 2026, compared to 25% for the EU.
The US Treasury extended Japan's sanctions waiver for Russian LNG purchases until the end of 2026, the fifth extension since 2022.
Cargoes from Sakhalin Island reach Japan in 2-3 days, versus 7 days from Australia and 20-40 days from the US Gulf Coast.
In August, Russian President Vladimir Putin visited one of the four disputed Kuril Islands, prompting a weak response from Prime Minister Takaichi.

Energy Dependence

Japan imports more than 97% of its total LNG, and crude oil and coal are almost 100% imported. LNG accounts for 30% of Japan's electricity generation. Domestic gas industry leaders warn that substituting the 5 million tonnes of Russian LNG annually would risk supply shortages and higher costs. Sakhalin cargoes arrive in 2-3 days, significantly cheaper than Australian or US Gulf Coast alternatives.

US Pressure and Waivers

The US has pressured Japan to phase out Russian LNG from Sakhalin-II since restrictions began in 2022. In June, the US Treasury extended Japan's sanctions waiver until end-2026, the fifth extension. Tokyo's lobbying for exemptions is unlikely to succeed indefinitely, and officials must plan for Washington's patience running out.

Kuril Islands Litmus Test

In August, Putin made an unprecedented visit to one of the four disputed Kuril Islands controlled by Russia. Japan regards the islands as 'illegally occupied' and the dispute prevents a formal World War II peace treaty. Prime Minister Takaichi called the visit 'absolutely unacceptable' and said it 'hurt the public sentiment of the Japanese people'. The response was panned domestically as weak, and the government has yet to follow through on announced countermeasures. Government insiders say concerns over energy loomed large and any cessation of Sakhalin-II imports was ruled out.