Relations Between Japan and Russia post-Ukraine Invasion

Introduction

Since the onset of the Ukraine war in 2022, commercial relations between Japan and Russia have come under considerable strain. In reaction to the invasion, Japan enacted a broad range of economic sanctions against Russia, which included rescinding Russia’s most-favored-nation (MFN) status and freezing the assets of Russian President Vladimir Putin and the Russian central bank.[1] Russia, for its part, retaliated by suspending peace treaty talks with Japan and ended dialogue over resolving the territorial dispute over what Japan considers its ‘Northern Territories’, which Russia asserts is part of its Kurile Island chain.  

Another early casualty of the post-invasion diplomatic breakdown was the 1998 fisheries agreement, which allowed Japanese fishermen to access key fishing grounds in the disputed Northern Territories.[2]  When Russia suspended the agreement in 2022, instead of pointing to Tokyo’s failure to fulfill its financial obligations under the fisheries agreement itself,  Moscow attributed the cancellation to Japan’s failure to perform a separate agreement, namely the provision of technical equipment for a liquefied natural gas (LNG) project in Russia’s eastern region known as Sakhalin-2.[3] It remains unclear whether Japan had truly intended to default on the agreement, considering that the Sakhalin project alone accounts for approximately 9% of Japan’s LNG imports and is partially owned by Japanese companies.[4] The Japanese government protested the suspension as “regrettable” and “unacceptable,” emphasizing the urgency of safeguarding its fishing operations in the region.[5] ​

The linkage of commercial agreements in the Kuriles so explicitly to another bilateral issue is unprecedented in the history of Russo-Japanese relations. Why has Russia adopted this strategy and what may be the potential impact of this going forward? This blog post aims to examine how Russia strategically linked Japan’s participation in the Sakhalin-2 energy project to the renewal of this long-standing fishing agreement, thereby turning an ostensibly technical fisheries arrangement into a tool of coercive diplomacy. Russia’s adoption of this strategy is indicative of the general breakdown of Russo-Japanese relations, catalyzed by the 2022 invasion of Ukraine, and marks a break from the two countries’ previously conciliatory approach to bilateral engagement.

The Weaponization of Interdependence: Russo-Japanese Relations Through the Lens of Coercive Issue Linkage

To understand this strategy, this post draws on a game-theoretic framework of coercive issue linkage, —a strategy which explains how countries use the threat of punishment and cross-issue leverage to enforce agreements.[6] In this case, Japan’s participation in the Sakhalin-2 liquefied natural gas (LNG) project, particularly its delivery of technical equipment and investment support, was linked to the 1998 fisheries agreement, under which Russia granted Japanese vessels access to waters near the disputed Northern Territories. 

This post contextualizes this instance of enforcement linkage across these two domains as indicative of the broader breakdown in Japan–Russia relations. The willingness to weaponize cross-domain interdependence reflects a deeper structural breakdown in the post-Cold War diplomatic architecture that had previously governed the relationship.

Geographic and Historical Background

The term “Northern Territories” is used by Japan to refer to an island chain located off the northeastern coast of the Nemuro Peninsula. The group of islands consists of Habomai (itself a cluster of small islets), Shikotan, Kunashiri (known in Russian as “Kunashir”), and Etorofu (“Iturup” in Russian).[7] Sovereignty over these islands is disputed, with both Japan and the Russian Federation asserting claims.

The dispute over who is the rightful sovereign of these islands stems from the historical legacy of World War II and the subsequent treaties delineating the territorial boundaries between the two countries. In April 1945, the Soviet Union renounced its 1941 neutrality pact with Japan and declared war on Japan later that same year. Soviet forces launched a landing operation in the final days of the war and occupied the Kurile Islands (Chishima in Japanese) and the islands of Shikotan and Habomai in late-1945.[8] Japan perceived this breach of the neutrality pact and subsequent invasion as a deep betrayal, greatly impacting diplomatic relations ever since.[9] 

After the war, Japan and the Allied Powers signed the San Francisco Peace Treaty in 1951, under which Japan relinquished all claims to ‘the Kurile Islands.’[10] However, despite the de facto occupation of these territories by the Soviet Union, the treaty did not specify which country was to take ownership of the islands.[11] Furthermore, the scope of the Kurile Islands was not defined in the agreement, leading to conflicting interpretations that continue to this day. From the Russian standpoint, Japan’s so-called ‘Northern Territories’ form part of the Kurile Island chain, which stretches from the Kamchatka Peninsula southwards to the Nemuro Peninsula.[12] In contrast, the Japanese government maintains that Russia’s continued presence in their ‘Northern Territories’ constitutes an illegal occupation.[13] 

This is further complicated by the fact that the Soviet Union never signed the San Francisco Peace Treaty, denouncing the text as failing to acknowledge Soviet sovereignty over the Kuriles, among other issues.[14] As a result, the Soviet Union—as well as its successor state, the Russian Federation—never signed a peace treaty with Japan, nor resolved this territorial dispute in any substantive manner. Although peace negotiations commenced in 1955, the territorial dispute emerged as a central issue preventing a peace settlement, continuing to shape the contours of Russo-Japanese relations to the present day.

Continuing Commercial Relationship

Despite the unresolved status of the territorial dispute, commercial activity has continued through a series of pragmatic agreements, particularly in the fishing sector. In 1963, the Japan Fisheries Association, a private body, concluded an agreement with the Soviet State Fishery Committee, permitting Japanese fishermen to harvest kombu (tangle seaweed) in the waters around Kaigara Island, one of the smaller islets within the Habomai group.[15]

This spirit of commercial cooperation was further reflected in the 1998 Agreement on Certain Aspects of Cooperation in the Fishing of Marine Living Resources, which allowed Japanese vessels to operate in the waters surrounding the four disputed islands so long as annual payments were made to Russia and catches stayed within fishing quotas.[16] Crucially, the Agreement expressly stipulated that any activities or measures undertaken pursuant to its terms would not be construed as affecting the legal positions or views of either party regarding sovereignty over the islands.[17] Under the framework of this Agreement, Japanese fishing activities are governed by a memorandum of understanding between organizations designated by their respective governments.[18]

Russo-Japanese Relations and the Advent of the Ukraine War

As noted above, Japan, together with much of the Western world, reacted to the 2022 invasion of Ukraine by applying economic and trade sanctions against Russian interests. Included in these sanctions was a complete ban on Russian imports of coal and gas.[19] This next section will explore the context of this shift, especially as it reflects culmination of the broader decline in Russo-Japanese relations.

 Japan’s Role in Russia’s ‘Asian Turn’

Historically, Japan has played a key role in Russia’s ‘Asian turn’, maintaining and developing trade even during periods of Western sanctions, such as those following the Soviet invasion of Afghanistan in the early 1980s.[20] Japan’s strong response to the invasion of Ukraine has surprised many observers, marking a departure not only from its historical approach to Russia but also from its more restrained reaction to the annexation of Crimea in 2014.[21] This may reflect Japan’s new self-understanding as a key player in preserving the rules-based international order, particularly as the US’s role in preserving this order seems to be diminishing.

This also marks a departure from former Prime Minister Shinzo Abe’s rapprochement strategy with Russia, which aimed to strengthen bilateral ties as a means of curbing closer alignment between Moscow and Beijing.[22] Beginning with reciprocal state visits in 2016, both Abe and Russian President Vladimir Putin sought to develop a deeper partnership based on shared strategic interests, which would also include the resolution of the issue of the Northern Territories and finally signing a peace treaty.

During their meeting in Russia, Abe introduced an ‘Eight-Point Cooperation Plan’ as a roadmap for advancing bilateral relations. The plan included an eclectic mix of potential areas of cooperation, ranging from healthcare to energy. One key component of the plan involved encouraging Japanese investment in industrial development and the creation of export hubs in the Russian Far East, which would include regions such as Sakhalin.[23] Streltsov and Nelidov argue that Japan’s offer of economic assistance to Russia reflected an underlying expectation of reciprocal concessions from Moscow, particularly on the territorial issue.  To make the proposal more appealing, Abe also regularly affirmed that the basis of their territorial claims would be the 1956 Joint Declaration, which stipulated that only two of the four contested islands would be transferred to Japan after a peace treaty is concluded.[24] However, despite significant diplomatic investment, Abe’s rapprochement strategy would fail to yield a peace treaty or territorial resolution.[25]  In fact, in 2020—the year Abe left office—Putin pushed through an amendment of the Russian constitution that prohibits any transfer of territory to another country once it has been declared Russian territory, which would include the Kurile Islands.[26] 

The failure of Abe's Russia policy reflects a fundamental disconnect between the priorities of the two countries: while Japan consistently sees the resolving of the territorial dispute and signing a peace treaty as central to bilateral ties, Russia sees the relationship in largely economic terms.[27] This strategic misalignment leading up to 2022 would carry broader implications, particularly in areas like energy security, where Japan's dependence on Russian LNG has only deepened.

Russia’s role in Japan’s Energy Security

This break poses unique risks for Japan, given that LNG imports from Russia are essential to its energy security. Japan is heavily reliant on imports of LNG, with domestic production accounting for only three percent of LNG demand.[28] Much of this is sourced through international trade from countries around the Asia-Pacific.[29] While it had previously looked to nuclear power as a source of alternative energy, the Fukushima earthquake and nuclear disaster in 2011 have since made such an option a political non-starter.[30] 

In the late 20^th century, Japan depended heavily on Southeast Asian countries—such as Indonesia, Malaysia and Brunei—for LNG imports. However, starting in the early 21^st century, Japanese companies became increasingly hesitant to engage in long-term contracts for LNG supply from these countries, having faced supply disruptions caused by political instability. Instead, these companies turned to countries like Australia and Russia as long-term sources of LNG.[31] Japan is not alone in this, with other countries in East Asia, such as China and South Korea, also sourcing large amounts of LNG from these countries.[32] 

Relying on a limited pool of LNG suppliers has intensified competition for available supply. As Vivoda notes, increased competition and a lack of regional cooperation between importers give exporters, ‘much bargaining power to influence the negotiation outcome in their favor, thus preserving the existing contractual and pricing arrangements.’ [33] As a result, Japan and other importers have been forced to enter long-term contracts, limiting their ability to diversify to other energy sources.

From Cooperation to Coercion

The suspension of the 1998 Japan–Russia fisheries agreement following Japan’s withdrawal of LNG equipment from the Sakhalin-2 project illustrates a compelling instance of a coercive linked enforcement strategy. In such a strategy, a deviation in one domain—here, Japan’s failure to continue supporting the Sakhalin-2 project—is met with retaliatory measures in another, seemingly unrelated domain.[34] By revoking access to fishing rights near the disputed Northern Territories, Russia signaled that non-compliance in the energy sector would have consequences for trade between the two countries. 

Based on game-theoretic models, cooperation in both these areas depends on whether the long-term benefits of continued cooperation outweigh both the short-term gains from defection plus the long-term punishment of reversion to the static Nash equilibrium.[35] A static Nash policy represents the non-cooperative baseline where each country pursues its own interests in isolation, without cooperation.[36] In this context, linking the fisheries agreement to energy cooperation might initially seem advantageous for Japan. Since access to the disputed fishing grounds is arguably more important to Japan than to Russia, tying it to Russian energy arguably increases the chances of sustaining cooperation. However, in this case, Japan values both domains; therefore, it becomes more vulnerable to cross-domain punishment if relations deteriorate.

This dynamic of strategic dependence became particularly salient in mid-2022, when President Putin ordered a restructuring of the Sakhalin-2 LNG project, transferring it to a new legal entity controlled by the Russian government. Under this new arrangement, Russia forced foreign stakeholders to re-confirm their participation under Russian terms​.[37] Under Russian Decree No. 416, if a company chose not to transfer their shares to the new entity, shares in the original company would be sold and proceeds deposited into a Russian ‘C-type’ bank account.[38] Funds would only be released after the Russian government conducts an audit, at its own discretion, to assess any damages caused as a result from deviations from the original agreement.[39]

In August 2022, Mitsui & Co. and Mitsubishi chose to retain their combined 22.5% interest in Sakhalin-2’s new operating company​. Backed by the Japanese government, they agreed to Moscow’s conditions to ensure LNG deliveries would continue.[40] Despite linking the 1998 agreement to Japan’s continued participation in the Sakhalin project, there is no sign from Moscow that it will reinstate the fisheries agreement. Prospects of salvaging the agreement are likely to be overshadowed by the fact that, as of December 2024, Japan and Russia had yet to agree on fishing quotas within each other's EEZs for 2025.[41]

Conclusion

While historically perceived as the least ‘anti-Russian’ of the Western-aligned nations,[42] Japan’s increasing alignment with the West has prevented the prospect of closer strategic alignment between Tokyo and Moscow. Reflecting this shift, Japan’s National Security Strategy no longer considers Russia to be a partner in the region but rather considers it a security challenge and its actions to be a direct threat to the ‘very foundation of the international order’,[43] placing Russia in the same category as China and North Korea.[44] In response to this realignment, Russia has increasingly resorted to coercive techniques in its dealings with Japan, exploiting its vulnerabilities to achieve strategic ends. The restructuring of the Sakhalin-2 LNG project illustrates Russia’s willingness to unilaterally alter agreements in sectors where Japan is heavily invested.

There are many potential consequences to this realignment for both countries. First, it undermines trust and the possibility for stable, long-term bilateral engagements. As noted earlier, even seemingly routine and apolitical matters, like fishing quotas, have become subject to politicization.[45] Secondly, this deterioration is likely to push Japan to seek further diversification of its energy sources.  For example, Japanese imports of American LNG have tripled over the past two years,[46] with this trend likely to continue. Mitsubishi has also agreed to import LNG from Canada, the first deal of its kind for a Japanese company.[47] However, with traditional LNG supplies such as Australia reducing exports and developing their own LNG reserves,[48] Russia is expected to remain a key component of Japan’s energy security strategy. Indeed, in June of this year, Japan purchased Russian crude oil for the first time in over two years, following exceptions granted by the EU and the United States, and is likely to continue to do so into the near future.[49]

[1] Michael Corbin, “Japan’s Trade with Russia Has Shrunk to a Trickle,” Responsible Statecraft, March 11, 2024, https://responsiblestatecraft.org/japan-russia/ , accessed May 1, 2025.

[2] Reuters, “Russia Suspends Agreement with Japan on Fishing near Disputed Islands,” Reuters, June 7, 2022, https://www.reuters.com/article/business/russia-suspends-agreement-with-japan-on-fishing-near-disputed-islands-idUSS8N2WX076, accessed May 2, 2025; Ministry of Foreign Affairs of Japan, “Agreement between Japan and the USSR Concerning the Settlement of Disputes and the Establishment of Diplomatic Relations,” https://www.mofa.go.jp/region/europe/russia/territory/edition01/agreement.html#:~:text=Article%206, accessed June 2, 2025 (‘1998 Agreement’).

[3] RTVI, “Rossiya priostanovila soglashenie s Yaponiej v sfere rybolovstva [Russia Suspends Agreement with Japan in the Field of Fisheries],” RTVI, June 7, 2022, https://rtvi.com/news/rossiya-priostanovila-soglashenie-s-yaponiej-v-sfere-rybolovstva/, accessed May 16, 2025.

[4] Kyodo News, “Mitsui, Mitsubishi to Keep Stakes in Russia Sakhalin 2 Energy Project,” Kyodo News, August 25, 2022, https://english.kyodonews.net/news/2022/08/314390ffe22b-mitsui-mitsubishi-to-keep-stakes-in-russia-sakhalin-2-energy-project.html, accessed May 2, 2025.

[5] Mari Yamaguchi, “Japan Criticizes Russia for Suspending Fishing Pact,” AP News, June 8, 2022, https://apnews.com/article/russia-ukraine-moscow-tokyo-japan-asia-004ab37ac37b35a2eb7695b7564d2502, accessed May 1, 2025.

[6] Giovanni Maggi, “Issue Linkage,” in Handbook of Commercial Policy, vol. 1 (Elsevier, 2016), pp. 513–64, https://doi.org/10.1016/bs.hescop.2016.04.017.

[7]  Shotaro Hamamoto and Tomoko Fukamachi, “Territory | Japan,” in Encyclopedia of Public International Law in Asia Online (Leiden: Brill), https://doi.org/10.1163/2772-8161_EPIL_COM_1020., accessed May 1, 2025.

[8] Alexander Bukh, These Islands Are Ours: The Social Construction of Territorial Disputes in Northeast Asia (Stanford, CA: Stanford University Press, 2020) p. 25; see also Hamamoto and Fukamachi, “Territory | Japan.”

[9] Kazuhiko Tōgō, Japan’s Foreign Policy 1945–2003: The Quest for a Proactive Policy (Leiden: Brill, 2005), p. 228–229.

[10] Hamamoto and Fukamachi, “Territory | Japan.”

[11] Kimie Hara, “The ‘Northern Territories’ Problem: A Continuing Legacy of the San Francisco System,” in D. V. Strelʹt︠s︡ov and Nobuo Shimotomai, eds., A History of Russo-Japanese Relations: Over Two Centuries of Cooperation and Competition (Leiden: Brill, 2019) p. 562.

[12] Hara, “The ‘Northern Territories’ Problem: A Continuing Legacy of the San Francisco System.”

[13] Hara, “The ‘Northern Territories’ Problem: A Continuing Legacy of the San Francisco System” p. 562.

[14] Hara, “The ‘Northern Territories’ Problem: A Continuing Legacy of the San Francisco System” p. 565.

[15] Hamamoto and Fukamachi, “Territory | Japan.”

[16] 1998 Agreement.

[17] 1998 Agreement, Article 6.

[18] 1998 Agreement, Article 2.

[19] Naresh Subba, ‘Japan’s Energy Security and the Importance of the “FOIP” in Japan-India Cooperation in Indo-Pacific,’ in Pardeep Singh and Bendangwapang Ao (eds), The Intersection of Global Energy Politics and Climate Change: A Comprehensive Analysis of Energy Markets and Economics (Springer Nature Singapore, 2025) p. 220 <https://link.springer.com/10.1007/978-981-96-0535-4>.

[20] Dmitry Streltsov and Vladimir Nelidov, ‘Japan’s Role in the Russian Turn to the East’ in Anatoly Torkunov, Dmitry Streltsov and Ekaterina Koldunova (eds), The “Asian Turn” in Russian Foreign Policy (Springer Nature Singapore, 2024) p. 54 <https://link.springer.com/10.1007/978-981-97-5392-5>.

[21] Tanvi Riise, Japan’s Quest for Energy Security in the “New” World of Geopolitics, ObservatoryIndo-Pacific, May 2022, pp. 1–13, https://www.sciencespo.fr/ceri/observatory-indo-pacific/wpcontent/uploads/2022/07/IP-Essay-Tanvi-RIISE-Japans-energy-security.pdf.

[22] Kawaraji Hidetake, “Japanese-Russian Relations in the 21st Century, 2001–2015,” in D. V. Strelʹt︠s︡ov and Nobuo Shimotomai, eds., A History of Russo-Japanese Relations: Over Two Centuries of Cooperation and Competition (Leiden: Brill, 2019) p. 521–533.

[23] “Improving Lives in Russia,” JapanGov, https://www.japan.go.jp/tomodachi/2018/japan_and_russia_edition_2018/improving_lives_in_russia.html, accessed July 16, 2025.

[24] Dmitry Streltsov and Vladimir Nelidov, ‘Japan’s Role in the Russian Turn to the East’ p. 60.

[25] Hidetake Kawaraji, “Japanese-Russian Relations in the 21st Century.”

[26] Maxim Trudolyubov, “The 2020 Amendment to the Russian Constitution Is Another Sign Putin’s Invasion Isn’t Going as Planned,” Wilson Center Blog, https://www.wilsoncenter.org/blog-post/2020-amendment-russian-constitution-another-sign-putins-invasion-isnt-going-planned, accessed July 16, 2025.

[27] Dmitry Streltsov and Vladimir Nelidov, ‘Japan’s Role in the Russian Turn to the East’ p. 61.

[28] Energy Security in Japan, 77.

[29] Energy Security in Japan, 79.

[30] Vlado Vivoda, Energy Security in Japan: Challenges after Fukushima (Farnham, UK: Ashgate, 2014) (‘Energy Security in Japan’) 71.

[31] Energy Security in Japan, 80.

[32] Energy Security in Japan, 80.

[33] Energy Security in Japan, 94.

[34] Maggi, “Issue Linkage,” p. 521.

[35] Maggi, “Issue Linkage,” p. 530–531.

[36] Maggi, “Issue Linkage,” p. 521.

[37] Kyodo News, “Mitsui, Mitsubishi to Keep Stakes in Russia Sakhalin 2 Energy Project.”

[38] Rockall, Maximilian G., and Bock, Michelle Glassman. “Asia LNG Market Update: Russian Decree No. 416.” Lexology, July 14, 2022. https://www.lexology.com/library/detail.aspx?g=f546eb62-c08b-4c32-a9f4-898eb29c9b96, accessed June 13, 2025.

[39] Rockall and Bock, “Asia LNG Market Update: Russian Decree No. 416.”

[40] Kyodo News, “Mitsui, Mitsubishi to Keep Stakes in Russia Sakhalin 2 Energy Project,”

[41] Masahiko Takeuchi, “Japan, Russia Fishing Talks Fail to Agree on 2025 Quotas,” Undercurrent News, December 2, 2024, https://www.undercurrentnews.com/2024/12/02/japan-russia-fishing-talks-fail-to-agree-on-2025-quotas/?utm_source=chatgpt.com, accessed June 11, 2025.

[42] Dmitry Streltsov and Vladimir Nelidov, ‘Japan’s Role in the Russian Turn to the East’ p. 57.

[43] National Security Strategy of Japan (December 2022) <https://www.cas.go.jp/jp/siryou/221216anzenhoshou/nss-e.pdf>

[44] Tanvi Riise, Japan’s Quest for Energy Security in the “New” World of Geopolitics p. 6.

[45] Masahiko Takeuchi, “Japan, Russia Fishing Talks Fail to Agree on 2025 Quotas,” Undercurrent News, December 2, 2024, https://www.undercurrentnews.com/2024/12/02/japan-russia-fishing-talks-fail-to-agree-on-2025-quotas/?utm_source=chatgpt.com, accessed June 11, 2025.

[46] Inomata, Rimi, and Asahi, Taisei. “Top Japan Power Provider JERA to Triple LNG Imports from U.S.” Nikkei Asia, June 13, 2025. https://asia.nikkei.com/Business/Energy/Top-Japan-power-provider-JERA-to-triple-LNG-imports-from-US, accessed June 13, 2025.

[47] Watanabe, Shin, and Hama, Misa. “Mitsubishi Corp. to Start Importing Canadian LNG in 1st for Japan.” Nikkei Asia, June 13, 2025. https://asia.nikkei.com/Business/Energy/Mitsubishi-Corp.-to-start-importing-Canadian-LNG-in-1st-for-Japan, accessed June 13, 2025.

[48] Tom Rabe and Angela Macdonald-Smith, “Japan’s Warning to Albanese about Domestic Gas Reserve,” Australian Financial Review, July 8, 2025, https://www.afr.com/companies/energy/japan-s-warning-to-albanese-about-domestic-gas-reserve-20250708-p5mdb9.

[49] Shotaro Tani, “Japan Buys Russian Crude Oil for First Time in Over 2 Years,” Nikkei Asia, June 12, 2025, https://asia.nikkei.com/Business/Energy/Japan-buys-Russian-crude-oil-for-first-time-in-over-2-years, accessed July 9, 2025.