Moscow’s hold on the islands off Hokkaido rests on a post-WWII land grab rather than any deep historical tie, and a Kremlin bogged down in Ukraine has once again opted to pick a quarrel with a neighbour whose money it still needs.

In more than a quarter of a century at the top of Russian politics, Vladimir Putin had never set foot on any of the four islands Tokyo calls the Northern Territories. On August 13 he did, touring Etorofu – Iturup as it is called in Russia – and Japan answered exactly as the Kremlin must have expected.

Prime Minister Sanae Takaichi branded the trip “absolutely unacceptable”, and Foreign Minister Toshimitsu Motegi called in Russia’s ambassador, Nikolay Nozdrev, to receive a formal protest.

Putin was unrepentant.

Speaking in Kyrgyzstan on the sidelines of a Shanghai Cooperation Organization meeting on September 2, he said the slide in relations was “entirely Japan’s fault”. Chief Cabinet Secretary Minoru Kihara retorted that the damage traced back to Russian aggression against Ukraine, and that pinning it on Tokyo was unacceptable.

Conquest dressed up as heritage
The historical record does Moscow few favours. When the two empires first agreed a frontier, in the Treaty of Shimoda of 1855, the line was drawn between Etorofu and Urup, placing all four of today’s contested islands on the Japanese side.

Two decades later St Petersburg handed over the rest of the Kuril chain in return for sole control of the Sakhalin peninsula. For the next seventy years no Russian official governed Etorofu, Kunashiri, Shikotan or the Habomai islets.

That ended only when Soviet forces landed in the weeks after Japan’s surrender in August 1945. In reality, neither side can call itself the original inhabitant – that title belongs to the local Ainu people – but Japanese administration of the islands predates Russia’s by the best part of a century. Moscow’s title merely rests on the spoils of a war it joined in its final days, which Tokyo still regards as an unlawful seizure.

Even the Soviet Union once accepted that the matter was open. The 1956 joint declaration, which marked its 70th anniversary on October 19, restored diplomatic ties and promised Shikotan and the Habomais back to Japan once a peace treaty was signed.

No treaty has ever followed, and Putin now insists the territorial question is closed.

Sabre-rattling on an empty purse
Moscow’s tone towards Tokyo however, has turned openly hostile. A week before Putin’s visit, the defence ministry announced exercises involving 60 warships, 30 aircraft and upwards of 13,000 personnel across the Sea of Japan, the Sea of Okhotsk and the north-western Pacific, with live firing around the disputed islands.

In September, foreign ministry spokeswoman Maria Zakharova demanded that Japan send home the US Army’s Typhon launchers stationed on Kyushu, adding that Tokyo must accept the outcome of the Second World War “including its territorial aspects concerning the southern Kuril Islands”.

For the Russian leader, the bravado sits awkwardly beside the numbers. Military outlays swallowed 44% of all federal spending in the first half of 2026, a record, at RUB10.7 trillion ($133bn), according to Janis Kluge of the German Institute for International and Security Affairs. Net oil tax receipts fell by roughly 22% year on year in August as Urals prices slipped, and the finance ministry had already raised its own spending ceiling with the deficit running 70% beyond plan.

A state that has spent more than four years failing to finish a war on its western border is in no shape to open a second one opposite Hokkaido almost 8,000 kilometres away. The drills and the island garrisons are theatre, aimed as much at a domestic audience in Moscow living rooms as at Tokyo, and Japan’s steady rearmament means the performance carries a growing price.

The buyer Russia cannot afford to lose
What makes the provocation so self-defeating is that Japan remains one of the few wealthy customers Russia still has in the east. Mitsui and Mitsubishi hold 12.5% and 10% respectively of Sakhalin Energy, the operator of Sakhalin-2, and Japanese consortia own 30% of Sakhalin-1. Sakhalin-2 meets roughly 9% of Japan’s LNG needs, and in September Moscow trimmed the volume of the project’s gas set aside for its own Far East, leaving more available for export. Washington’s waivers covering those cargoes now run to December 18, 2026.

The dependence is lopsided. Utilities such as JERA say they could source replacement LNG if forced to, albeit at a cost. Russia, having lost Europe, has far fewer places to send Sakhalin’s output, and its biggest alternative market drives a much harder bargain.

Tokyo keeps buying because energy security demands it, not because it trusts Moscow; Japanese opinion of Russia, never warm, curdled after the 2022 invasion, and no prime minister could sell a thaw at home.

Beijing keeps ledgers, not friends
Nor can Moscow lean on China to make up the difference. On security the two have drawn closer – Japan’s latest defence white paper now calls their cooperation a “deepening strategic partnership” – but on commerce Beijing negotiates as a creditor would.

The Wall Street Journal reported that Chinese officials will sign up to Power of Siberia 2 only at a price near China’s subsidised domestic tariff of about $50 per 1,000 cubic metres. Sergey Vakulenko of the Carnegie Russia Eurasia Center puts Russia’s break-even at the border at around $125. Russian forecasts already have China paying some 39% less this year than Gazprom’s other export clients.

Beijing, meanwhile, has been cultivating contacts across Russia’s elite with an eye to whoever follows Putin. That is how a partner behaves when it values the discount more than the man.

Tokyo, for its part, has kept the door ajar. “Even amid the difficult state of Japan-Russia relations, we will continue the necessary communication with the Russian side and work toward breaking the current deadlock,” Kihara said on October 19. Moscow would be wise to walk through it.

A Russia that devotes more than two-fifths of its budget to one war, sells gas to Beijing at a deep discount and treats its most solvent eastern customer as an enemy is not projecting strength from Etorofu. It is advertising how few friends it has left.