KUWAIT CITY, March 27: Japan’s three biggest banks are teaming up with major US and European lenders to loan $1 billion to help Kuwait increase oil output, seeking to calm energy markets roiled by Russia’s invasion of Ukraine, reports Al-Anba daily quoting Nikkei Asia newspaper. Mizuho Bank, Sumitomo Mitsui Banking Corp. and MUFG Bank are making the loan to Kuwait Petroleum Corp., along with HSBC and JPMorgan Chase.

Mizuho is expected to be the lead underwriter. Japanese Trade Minister Koichi Hagiuda will meet with Kuwaiti Oil Minister Mohammed al-Fares as early as the coming week to sign off on the deal. Disruptions caused by the war in Ukraine and sanctions on Russia have dominated oil markets for the past few weeks, sending prices up and setting off a frantic scramble by governments to look for energy supplies from other regions.

The loan comes after Kuwait asked Japan for support in lifting its oil production capacity. Japan’s government is backing up the deal with trade insurance. By insulating private companies from investment risks, the government seeks to help shore up oil supplies from the Middle East.

The ban on Russian oil imports by the US and Europe have accelerated energy price increases. West Texas Intermediate futures have risen to above $110 per barrel from $90 on the New York Mercantile Exchange since the invasion of Ukraine. Japan has joined the U.S. and Europe in urging oil-producing nations, particularly those in the Middle East, to step up production, but only a handful, including Kuwait, have room for capacity expansion. The latest deal could spur similar efforts to encourage production increases with direct financial assistance.