Diplomatic tensions have erupted between Russia and Japan, after a high-profile visit by Russian President Dmitri Medvedev to the South Kuril Islands on Monday. Known to the Japanese as the Northern Territories, the strategically located island chain is claimed by both countries.

Following a visit to Vietnam, where he witnessed the signing of a new bilateral agreement on nuclear energy production, the Russian president stopped off for a four-hour tour of an islet in the disputed island chain. While on Kunashir (Kunashiri to the Japanese), the Russian president announced his intention to devote resources to the economic development of the region.

In a challenge to Tokyo, Medvedev remarked during his visit: “I won’t hide the fact that we’re interested in people staying and living here.”

Japan responded to the Kremlin’s move by describing Medvedev’s brief stopover as regrettable. Foreign Minister Seiji Maehara insisted, “the four islands are part of our country’s territory.”

On Tuesday, the country’s ambassador to Russia was temporarily summoned home.

The chief cabinet secretary of Prime Minister Naoto Kan, Yoshito Sengoku, told the press that same day that the government is reviewing Russian-Japanese economic ties and discussing “appropriate measures.”

“The Japan-Russia relationship is based on economic cooperation in Siberia, Sakhalin and four northern islands, and we have to think again about what effective action we can take when this kind of thing happens,” he said, according to the Daily Yomiuri.

The Kremlin has refused to flinch in the face of Tokyo’s vociferous objections. Rather, it has added fuel to the fire by announcing that Medvedev intends to go to the area again. Speaking from Oslo on Tuesday, Russian Foreign Minister Sergei Lavrov said that Medvedev “expressed his satisfaction with his trip to Kunashir” and that “he plans to visit the other islands” as well.

Monday’s stopover by the Russian president was the first time a Russian leader has gone to the South Kurils/Northern Territories since the Soviet Union won control of the region in the aftermath of World War II. Japan has contested Russia’s claim ever since. Prior to the end of the war, the islands had changed hands numerous times between the two powers.

The South Kurils/Northern Territories are of significant strategic and economic value. They are within the Sakhalin Oblast, one of the highest-yielding natural resource regions in Russia. Sitting astride the Sea of Okhotsk and the northern reaches of the Pacific, the island chain is surrounded by waters that are considered among the top fisheries in the world, as well as an abundant source of undersea silver, gold and oil. Discover magazine notes that “presently Russia is pushing the United Nations to expand its territorial claim further over the [Sea of Okhotsk’s] shelf so it can begin trying to the tap the perhaps billions of tons of oil, and trillions of cubic feet of natural gas, in the sea.”

The Kremlin’s hard line on the South Kurils/Northern Territories has further deepened the crisis facing the government of Japanese Prime Minister Naoto Kan, which has faced recent tensions with China over the Diaoyu/Senkaku Islands. In mid-September, the Japanese coast guard detained a Chinese boat captain after his fishing trawler collided with a coast guard vessel in the disputed waters around these Islands. This led to a sharp confrontation with China, temporarily abated by the release of the captain.

Some commentators have speculated that the brazenness of Medvedev’s actions are designed to make the Russian president, who has been criticized in some quarters as being too accommodating to the West, appear to be a strong national leader in the lead-up to the 2012 elections. Such domestic political calculations doubtless play a role in the Kremlin’s action.

The assertion of Russian sovereignty over the South Kurils/Northern Territories is also part of the Kremlin’s effort to shore up Russia’s position in the Far East and Asia more broadly.

While Russia’s energy dominance in the Far East, where much of the country’s oil and natural reserves are located, is well known, its geo-strategic grip over the region has weakened in recent decades. With the collapse of the Soviet Union, there has been a significant decline in the size of Russia’s Far Eastern population. And while the natural resource sector has been able to produce great wealth for the country, Russia is increasingly in need of foreign investment in order to maintain, upgrade and expand its infrastructure and productive capacity.

Russia views, in particular, China’s economic might, growing political clout and massive population right at its border with wariness. In September 2008, Medvedev told attendees at a socioeconomic development conference held in Kamchatka, “if we do not step up the level of activity of our work [in the Russian Far East], then in the final analysis we can lose everything.”

In a September 30, 2008, article in the New York Times, Russia expert Paul Goble described Medvedev’s comments at the conference as follows: “The consequences of further inaction, the Russian president said, could come not only quite quickly but ‘end in an extremely dramatic way’ much as the Soviet Union did 17 years ago.”

These anxieties over the objective decline of Russian power in the Far East have led the Kremlin to press its territorial claims in the region more aggressively. With the Japanese government facing a conflict with China on the Senkaku/Diaoyu Islands, the Kremlin likely saw the present moment as ripe for demonstratively asserting its claims over the South Kuril/Northern Territory Islands.

The Kremlin is also seeking to deepen ties with other Asian powers to shore up its position in the region. While Japanese-Chinese relations remain tense in the wake of the Diaoyu/Senkaku Island incident, Moscow has made significant strides in its energy ties with Beijing.

On Wednesday, the recently completed Russia-China Oil Pipeline began making its first trial shipments from Skovorodino in Russia’s Far East south to Daqing in China. A second stage of the pipeline will bring oil east to the Pacific coast at Kozmino, which sits on the Sea of Japan. Experts have noted that the operation of the pipeline means that there is now a direct energy link between the world’s largest oil exporter, Russia, and its largest consumer, China.

Russia’s efforts to project its influence in other areas of Asia are also notable. In addition to just winning the rights to establish the first nuclear power plant in Vietnam, Russia is working with the country in other key ways as well.

In a November 2 article entitled “Moscow’s Asian Nuclear Campaign,” the Diplomat notes, “It’s becoming increasingly clear that Vietnam is emerging as Moscow’s most important partner in South-east Asia. The government-run Vietnam Oil & Gas Group, PetroVietnam, has been one of the few foreign companies allowed to extract oil on Russian territory and its RusVietPetro joint venture (51 percent owned by Russia’s Zarubezhneft) has been exploring deposits in the Nenets autonomous district since being registered in 2008.”