Japan says no decision yet on Iran oil import cuts
Wednesday, 22 February 2012 | 00:00
Japan's trade and foreign ministers said on Tuesday they haven't reached an agreement yet on how much Tokyo will cut Iranian crude imports to win waivers from U.S. sanctions designed to starve Iran of oil revenue.
Japan is likely to reduce imports of crude oil from Iran by at least 11 percent per year, the Yomiuri newspaper said earlier on Tuesday, to win an exemption from sanctions that could shut Japanese banks out of the United States if they facilitate trade in Iranian crude.
Japan and the United States reached an agreement at talks last week, with a formal deal expected by the end of this month, the Yomiuri said, citing unidentified sources.
"We are closely negotiating with the United States and are moving forward towards mutual understanding, but it is not the case that we have reached a conclusion," Japanese Trade Minister Yukio Edano told reporters.
The United States, angry over Iran's nuclear programme, wants Japan and others to cut back on Iranian imports.
Japan is the third-biggest customer for Iranian oil. It needs to import more oil in the wake of the Fukushima nuclear crisis. The country's refiners have yet to make significant cuts and are waiting on the Japanese government's instructions.
The United States says it will punish financial institutions that deal with Iran's central bank, the main clearing house for oil revenues. A country can earn a waiver from the sanctions if it significantly reduces trade with Iran.
Japan's Iranian crude imports fell 11.7 percent last year to 313,000 barrels per day (bpd), accounting for 8.8 percent of total oil imports. Japan's Iranian imports have declined by more than half from 683,000 bpd in 2003.
If Japan cut Iranian oil imports by 11 percent from last year's level, that would amount to a reduction of 34,430 bpd.
Cosmo Oil Co has already lowered its Iran crude imports to a little below 30,000 bpd from about 40,000 bpd since January.
Other refiners' imports are seen steady so far this year, but imports are likely to be down further from April, when most annual contracts renew. The oil refiners have been awaiting instructions from the Japanese government before launching talks with Iran on annual contracts.
In contrast, China and South Korea, the two other big Asian buyers of crude, increased imports from Iran last year.
The U.S. sanctions, which President Barack Obama signed into law in December, would penalise financial institutions for undertaking transactions with Iran's central bank, exposing the U.S. operations of Japanese banks that deal with Iran.
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