December 18, 2025 | 07:13 pm
TEMPO.CO, Jakarta - The U.S. Department of the Treasury has extended a sanctions exemption allowing companies to process transactions related to the Sakhalin-2 liquefied natural gas (LNG) project in Russia’s Far East until June 18, 2026.
The extension, announced on Wednesday, is particularly significant for Japan, which sources nearly 9 percent of its LNG from Russia.
As reported by Japan’s public broadcaster NHK, the six-month extension enables Japan, one of Washington’s key allies, to continue importing LNG and crude oil from the Sakhalin-2 project without violating U.S. sanctions.
Ahead of the decision, Japanese officials and energy companies had expressed concern over whether the exemption, previously set to expire on Friday, December 19, 2025, would be renewed. Losing access to Russian LNG, they warned, could undermine Japan’s energy security and lead to higher domestic energy prices.
The exemption is a carve-out from the sanctions imposed by the administration of former U.S. President Joe Biden in 2022, following Russia’s full-scale invasion of Ukraine.
The Treasury Department’s decision comes despite calls from U.S. Treasury Secretary Scott Bessent earlier this year urging Japan to take stronger steps to cut off Russia’s sources of war funding.
Japan, which relies on imports for about 70 percent of its energy needs, has repeatedly stressed the importance of stable fuel supplies to its U.S. and Group of Seven (G7) partners. Chief Cabinet Secretary Minoru Kihara said securing overseas LNG, including from Sakhalin-2, remains critical to the country’s energy security.
“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, as quoted by Business Recorder, on Thursday, December 18, 2025.
In mid-October, Bessent met with then Japanese Finance Minister Katsunobu Kato in Washington, amid heightened pressure from President Donald Trump’s administration on U.S. allies to support efforts aimed at ending the war in Ukraine.
Following the meeting, Bessent said on social media that he had conveyed Washington’s expectation that Japan would eventually stop purchasing Russian energy.
Japanese Prime Minister Sanae Takaichi reportedly told Trump during talks in Tokyo in October that banning Russian LNG imports would be difficult. According to sources, she warned that a unilateral halt could instead benefit China and Russia by reshaping regional energy flows.
Japan imported 8.6 percent of its LNG from Russia in 2024, all of it from Sakhalin-2, where Japanese trading houses Mitsui & Co. and Mitsubishi Corp. are major shareholders.
A senior official at Japan’s Ministry of Economy, Trade and Industry said Tokyo’s long-term policy of reducing reliance on Russian LNG remains unchanged, though alternative suppliers are unlikely to be secured in the near term
Unlike LNG, Japan did not import crude oil from Russia last year, according to official data, despite the sanctions exemption allowing shipments from Sakhalin-2.
Most long-term LNG supply contracts from Sakhalin-2, which is partly owned by Mitsui and Mitsubishi, are scheduled to expire between 2028 and 2033.
Read: US Urges EU Against Using Russian Assets for Ukraine
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