US allows oil sales from Russia’s Sakhalin-2 project through June 18

WASHINGTON: The US extended on Wednesday a waiver allowing oil sales from Russia’s Sakhalin-2 project through June 18 next year, a move that likely allows production of liquefied natural gas from the project to continue.

The general license, issued by the U.S. Treasury Department, is important for U.S. ally Japan, which gets about 9% of its LNG from Russia.

The license allowing transactions with Sakhalin-2 is a waiver to sanctions that had been imposed on the project by former President Joe Biden in 2022 over Russia’s full-scale invasion of Ukraine.

Japan, which depends on imported fuels for around 70% of its energy needs, has told the U.S. and allies within the Group of Seven major economies its position on energy security, Chief Cabinet Secretary Minoru Kihara said on Thursday.

“Securing LNG from overseas, including the Sakhalin-2 project, is extremely important for Japan’s energy security and we will continue to work closely with the United States and the international community to make every effort to ensure that Japan’s LNG supply is not hindered,” Kihara said.

The move came despite pressure in trade negotiations by the administration of U.S. President Donald Trump on China, India and Japan to reduce their purchases of Russian oil and LNG.

India’s Russian oil imports show resilience despite sanctions, sources say

The department also extended a waiver, also through June 18, allowing transactions involving Russian banks including Gazprombank related to civil nuclear power.

Japanese Prime Minister Sanae Takaichi told Trump during a meeting in Tokyo in October that banning Russian LNG imports would be difficult and if Japan ended its purchases, it would only make China and Russia happy, sources told Reuters.

Most supply from Sakhalin-2, which counts Mitsui and Mitsubishi as shareholders, is scheduled to end from 2028 to 2033.