Over 90% of Japan’s basic energy needs are supplied by the Middle East, with LNG accounting for almost 24% of the total energy package, according to government data.
The dependance escalated when Japan’s Fukushima nuclear plant was hit in an earthquake and tsunami in 2011. Other Japanese reactors were soon shut down.
Japan was the largest importer of LNG in the world, approximately 22% of the total market, until 2021, the U.S. Energy Information Administration reported. LNG is basically applied to generating electricity; furthermore, it has uses in houses for heating and cooking.
Since Russia supplies less than 10% of Japan’s LNG, the country can find other sources.
Recently, Asia LNG spot prices rose to a record, over $59 per million British thermal units (MMBtu) against less than $3 per MMBtu prior to the pandemic era.
With more leeway in its crude supply, according to Japan’s top refiners, the country can find substitute sources in the world’s spot market as Russian crude is dropped following the invasion. Russia supplies less than 4% of the country’s overall energy imports.
Higher LNG prices have affected households’ electricity bills in Japan, intensifying inflationary pressures.