Japan and the UK thrash out plans to cut Asia's reliance on Russian oil, as sanction-hit Moscow hunts for new buyers
- Japan and the UK discussed plans to cut Asia's reliance on Russian oil on Thursday.
- Russia is increasingly looking to Asia as an export market, as Western buyers shun the country.
Japan and the UK are discussing plans to cut Asia's reliance on Russian oil, as Western governments and their allies try to ramp up the economic pressure on Moscow.
Japanese Prime Minister Fumio Kishida met his UK counterpart Boris Johnson in London on Thursday to finalize the details of a security pact.
As part of the talks, the two countries are expected to agree to joint action to help key Asian economies to develop green energy so they can transition away from Russian oil and gas, the UK government said.
The meeting comes a day after the European Union proposed a total ban on Russian oil imports by the end of the year. European Commission President Ursula von der Leyen said the embargo was a necessary step to punish Russia economically for its invasion of Ukraine.
Von der Leyen said the bloc would phase out crude oil imports in six months and refined products by the end of the year, provided the EU's 27 countries agree on a deal.
Analysts said the move would pile the pressure on Russia to find alternative buyers of its oil, with Asia likely the prime focus. Britain is currently phasing out Russian oil purchases, and the US has already banned imports.
Asia, and in particular India, has taken advantage of the discounted price of Russian oil during the Ukraine conflict to increase its purchases. China's independent refineries have recently been buying Russian oil on the cheap, the Financial Times reported Tuesday.
The likely agreement between Japan and the UK is a sign that the two countries are keen to limit Russia's ability to profit from energy sales elsewhere in the world.
The UK government did not provide more detail about the plan, however, only saying that it would focus on developing green energy sources in Asia.
Rystad Energy analyst Bjornar Tonhaugen said Russia would find it hard to unplug from Europe and switch supplies to Asia.
"Russia will try to redirect as much volume as possible from the West to Asia, but infrastructure constraints will limit its abilities," he said.
"Some volumes may be redirected by sea from the West to the East, but the feasibility of maritime supplies will be strongly dependent on the availability of oil tankers willing to deal with Russian crude, especially given the risk of shipping and insurance sanctions."
The EU's plan to ban Russian oil imports may run into problems, however. Hungary, which imports much of its oil through Russian pipelines, said Wednesday it would reject the proposal in its current form because it would be highly damaging to the economy.