JAPAN: DIFFICULT POSITION

WSJ. Japan's increasing reliance on Russian energy has put Tokyo in a difficult position in the dispute over Ukraine and Crimea, with the latest developments gaining close scrutiny from an energy industry that has been disrupted by sanctions on its suppliers in the past.

"Japan's crude imports from Russia have risen sharply in recent years," noted Petroleum Association of Japan Chairman Yasushi Kimura at his monthly news conference Monday. "While there hasn't been any impact so far, we've been watching developments carefully," said Mr. Kimura, who is also chairman of JX Holdings Inc. (5020.TO), the country's biggest oil refiner by capacity.

Japan imports about 250,000 barrels a day, or 7% of its crude supply, from Russia. Industry minister Toshimitsu Motegi has noted that Russia is a major energy supplier for Japan and has also said he has been watching developments carefully.

Russian President Vladimir Putin formally annexed Crimea on Friday. In response, the European Union and the U.S. have broadened their sanctions against Moscow.

Leaders from the Group of Seven nations, including Japanese Prime Minister Shinzo Abe, are currently in the Hague in the Netherlands to talk about nuclear security and are expected to consider further sanctions against Russia.

Japan has so far rolled out limited sanctions that include suspending talks on relaxing visas restrictions for Russian visits, space cooperation and defense accords.

Mr. Kimura said it would be possible to find other crude oil sources even if imports from Russia are halted as part of possible sanctions against Moscow.

He added that Japan's liquefied natural gas imports would more likely be affected by sanctions targeting Russia's energy supplies than its oil imports.

Just four year ago, Japanese energy company Inpex Corp. (1605.TO) was forced to pull out of the massive Azadegan oil field project in Iran to comply with U.S.-led sanctions over Iran's uranium enrichment activities.

Japan, a nation with almost no energy resources of its own, has been encouraging Japanese companies to get involved in big international energy projects.

Russia has become a major energy focus as Japan seeks to reduce its heavy dependence on the Middle East.

Tokyo's fossil fuel needs have also grown sharply since the nation's nuclear reactors were idled amid safety concerns following the nuclear accident at Fukushima Daiichi in 2011.