Energy Crisis Stares Japan
Japan is said to be currently facing an energy crisis that can severely hurt the world’s third-largest economy as it is forced to tackle a combination of a weak local currency, the fallout from the Ukraine war, and a heatwave.
Because of its extreme dependence on imported energy, Japan has had to continue importing Russian oil and gas despite its verbal commitment to sanctions against Moscow.
Japan already depends on foreign oil and gas for 90% of its needs and has had a significant energy import bill. But as the yen fell to the lowest in 20 years, Japan’s bill became even bigger, with the price rise in crude oil, which has been some 40% in dollar terms since the start of 2022, reaching a whopping 70% in yen terms.
Netherlands Asks Large Energy Users to Trim Consumption
The government of Netherlands is working towards scaling back CO2 emissions as well as reducing its reliance on Russian energy products. It has therefore asked large energy consumers to cut back on their usage beginning at the start of next year.
Accordingly, large energy consumers will be forced to invest in all possible energy savings measures, provided the investment can be recouped within five years. The government will fund regulations to aid in the enforcement of such a plan. Authorities said the new step would save 19 petajoules of gas and 7 petajoules of electricity per year within the first 7 years. This is the equivalent of 4 million barrels of crude.
The new rule is announced not even two weeks after the Netherlands said it would lift its current restrictions on coal-fired power plants, activating its “early warning” phase of its energy crisis plan.
The Netherlands’ total coal-fired power capacity was 3.31 GW in 2020, and until the restrictions were lifted, this was set to fall to 3.18 GW by 2025, with eyes on a complete phase-out by 2030. Before the aggression in Ukraine, the Netherlands imported 15% of all its natural gas from Russia, and while it has found some alternate sources of LNG, analysts say it could still face a shortage this winter.
Tanker Operators Raking Huge Sums Shipping Russian Oil to China
Tanker operators shipping Russian crude are raking in huge sums sending Russian crude to China from Russia’s Far East.
Bloomberg said yesterday, by shipping Russian ESPO crude from Kozmino to the Chinese coast, a ship owner can make $1.6million – three times what they would have made before the war in Ukraine.
The report cited shipowners who said that industry players from Greece, China, and Turkey are eagerly taking advantage of the situation. Normally, they use Aframax tankers, which can carry about 730,000 bpd of crude, and transport ESPO from the Kozmino port on Russia’s Pacific coast.
China has become the main destination for Russian oil, along with India, since Moscow invaded Ukraine in late February.
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