Japan's proposal to cap Russian oil prices would lead to surge in cost, warns Moscow

Japan's proposal to place a cap on Russian oil prices would lead to significantly less crude on the market and could drastically push the oil prices higher, warned Former Russian President Dmitry Medvedev on Tuesday. Responding to the idea that was floated by Japanese Prime Minister Fumio Kishida on Sunday, Medvedev said on Telegram that Tokyo "would have neither oil nor gas from Russia, as well as no participation in the Sakhalin-2 LNG project" if Japan decided to go through with the proposal.

"Japanese PM Kishida recently blurted out that the price ceiling for Russian oil would be set at half its current price. Plus, a mechanism will be created that will not allow the purchase of our oil at a price higher than the established one," the former President wrote, as per Russian news agency RT. 

Furthermore, the former Russian President explained that Japan’s suggested method would severely limit the amount of oil available on the market, causing the price to be "much higher". Medvedev said, "In fact, it will be even higher than the predicted astronomical price of $300-400 a barrel. Compare this with the dynamic of gas prices."

Japan imposes new sanctions on Russia and Belarus

Meanwhile, in retaliation to Russia’s military aggression against Ukraine, Japan on Tuesday, July 5, extended its sanctions against the Kremlin administration and its closest ally, Belarus. Tokyo declared that it will suspend Russian gold imports as well as halt both countries' consultancy and accounting services in an effort to increase support for the war-torn nation, Nexta reported.

Further, it is important to note that Japan and its allies have been implementing severe sanctions against Moscow and providing aid to Kyiv ever since Russia invaded Ukraine. 

According to media reports, on June 27, Japanese Prime Minister Fumio Kishida declared that Japan would impose an export embargo on 90 entities that have ties to the military and freeze the assets of an additional 70 Russian individuals and organisations.

Apart from this, additional sanctions were declared by the Japanese government on two Russian banks and one Belarusian bank earlier on June 7. According to a TASS report, Japan would freeze the assets of the Russian Agricultural Bank, Credits Bank of Moscow, and Belarusian Bank of Development and Reconstruction starting from July 7. Notably, bank transactions as well as payments will be permitted, but only with prior approval from Japanese authorities. 

Image: AP