The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.
Euromoney Country Risk

Russia must build on its energy windfall

Growing demand for Russia’s energy exports should not divert the country from diversifying its economy.

Sadly, even the worst human tragedies present opportunities for some. So it is with Japan’s nuclear crisis triggered by last month’s earthquake and tsunami. The crippling of the Fukushima reactors means that Japan’s energy needs will become even more onerous. No country is poised to benefit more than Russia, the world’s biggest energy exporter.

To the Russian government’s credit its initial response to the disaster was compassionate; it diverted to Japan liquefied natural gas cargoes from its Sakhalin II project, even if it meant that contracts with other customers were broken.

Eventually business rationale will take over. About one-third of Japan’s energy needs have been met through nuclear power. The crisis means that its dependence on gas and oil imports will greatly increase. Japan already imports about 70 million tonnes of LNG a year, making it the world’s biggest buyer of the resource. It will probably have to increase that to between 75 million and 80 million tonnes just to replace the lost energy production from Fukushima.

Although it is difficult to tell what the long-term repercussions will be for global energy markets, in the short term natural gas prices surged after the earthquake. In the immediate aftermath the price per therm for summer delivery of LNG to the UK, for example, rose by 6.4%,

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree