Japan Buys Russian Crude for First Time in a Year as Hormuz Closure Drains Reserves

Two Japanese refiners purchased Russian crude last week for the first time in nearly a year, buying Sakhalin Blend under a U.S. sanctions exemption as the Strait of Hormuz closure pushes Japan's petroleum reserves toward depletion by end-June. Taiyo Oil and Idemitsu Kosan received cargo from the Oman-flagged tanker Voyager between May 2 and May 8, according to The Moscow Times and Japanese government sources. Japan's Agency for Natural Resources and Energy authorised the purchases to "ensure stable supply of petroleum products" as Middle Eastern flows remain disrupted. The volumes are a fraction of pre-sanctions flows. Japan imported roughly 33 million barrels of Russian crude in 2021, about 4% of total supply. After joining the G7 price cap regime, loadings collapsed to 1.9 million barrels by April 2022 and stopped entirely by mid-May. Small purchases resumed in January 2023 but have continued only intermittently — an 11-month gap separated a May 2025 cargo from this month's deliveries. The Sakhalin-2 exemption that makes these purchases legal has a specific mechanical rationale: the project supplies roughly 9% of Japan's LNG imports and about 3% of its power generation, and halting crude offtake risks reservoir overpressure that would shut down gas production and liquefaction. Japan's Petroleum Association has warned publicly that oil imports may need to resume to protect LNG flows. That exemption expires in June. The exposure is acute. Japan imported 94% of its crude from the Middle East in 2025, with more than 90% transiting Hormuz, which has been closed since late February. Government petroleum product reserves are projected to last until June 30. Brent was trading at $109.26 on the morning of May 19, more than 30% above pre-conflict levels; WTI stood at $102.36. The path to any expanded supply arrangement is narrow. Russian Ambassador Nikolay Nozdrev said on May 4 that Moscow would not consider formal requests for additional oil sales unless Japan scraps the $60-per-barrel price cap. Sakhalin-2 crude already trades above that threshold under the existing exemption — a quiet erosion of the G7 framework that stops short of a formal breach. A broader U.S. waiver for Russian oil purchases lapsed April 11 with no extension announced as of May 13, though Treasury Secretary Scott Bessent indicated one was under consideration. If the Sakhalin-2 exemption is not renewed, Tokyo faces an unpleasant binary: halt crude purchases and risk losing 9% of its LNG supply, or keep buying in violation of sanctions and expose Japanese companies to enforcement action. Either path sets a precedent other G7 members with supply shortfalls will be watching closely.