It appears that the plots of movies narrating epic battles for fuel may turn into a reality in the near future. More and more countries are facing energy shortages. Hence, they are looking for alternative suppliers and are ready to compete for them against the allies.
Recently, Russian leader Vladimir Putin signed a decree to change the ownership structure of the Sakhalin-2 upstream and LNG project amid Western sanctions imposed on Moscow. It means that Russia will create a company that will take over all obligations of the Sakhalin Energy Investment Company. As a result, it may spark a struggle for energy resources between the West and Japan. The decree will force Tokyo to look for new gas suppliers in markets already taken by other countries. Spot prices are likely to skyrocket, causing a new wave of panic in commodity markets.
Japan's Trade and Industry Minister Koichi Hagiuda has already asked the US and Australia to boost the output of liquefied gas (LNG) and ensure a stable supply to the country. He hopes this move will help Japan reduce energy dependence on Russia. Notably, Japan may face severe electricity shortages during the winter season due to the decree on Sakhalin-2, the Nikkei reported. Japan imports 10% of its LNG each year from Russia, largely under long-term contracts from Sakhalin-2.
