Mitsui, Mitsubishi shares slide after Medvedev threat on gas, oil supplies

G7 leaders last week agreed to explore imposing a ban on transporting Russian oil that has been sold above a certain price in an effort to reduce Moscow's revenues and deplete its war chest, but had not mentioned a specific figure for the cap. Japanese government spokesperson Seiji Kihara on Wednesday morning said he was aware of Medvedev's remarks but declined to comment on them.

Shares in Japanese trading firms Mitsui & Co and Mitsubishi Corp tumbled on Wednesday after former Russian president Dmitry Medvedev made comments threatening the loss of oil and gas supply to Japan.

Mitsui shares had lost 5.7% while Mitsubishi shares were down 5.4% by the midday break. Japan "would have neither oil nor gas from Russia, as well as no participation in the Sakhalin-2 LNG project," Medvedev, now deputy chairman of Russia's Security Council, wrote on social media on Tuesday.

His remarks came after Japanese Prime Minister Fumio Kishida said during a stump speech over the weekend that the Group of Seven (G7) countries had agreed to cap the price of Russian oil at around half its current level. G7 leaders last week agreed to explore imposing a ban on transporting Russian oil that has been sold above a certain price in an effort to reduce Moscow's revenues and deplete its war chest but had not mentioned a specific figure for the cap.

Japanese government spokesperson Seiji Kihara on Wednesday morning said he was aware of Medvedev's remarks but declined to comment on them. He also declined to confirm if there was a specific figure for a cap being discussed by the G7, saying only that the "specifics of a cap and pricing level have yet to be decided and will be discussed among G7 members".

Russia announced on Friday a decree that seizes full control of the Sakhalin-2 gas and oil project in the country's far east, a move that could force out Shell and Japanese investors. The Sakhalin-2 project is one of the world's largest LNG projects and about 60% of the LNG it supplies under long-term contracts is shipped to Japan. Mitsui and Mitsubishi hold stakes of 12.5% and 10% in the project respectively.

 

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