Japan refiners maintain crude loading from Iran despite bank move
Friday, 18 May 2012 | 00:00
Japanese refiners have maintained their loadings of crude from Iran as of Thursday, despite news that Tokyo-Mitsubishi UFJ bank has suspended all transactions with Iranian banks, industry sources told Platts.
Tokyo-Mitsubishi UFJ bank handles most transactions for Japanese refiners purchasing Iranian crude oil, according to the sources.
Japanese buyers, however, have maintained their crude loadings from Iran because the National Iranian Oil Company is allowing this, even though the Japanese may have faced payment difficulties, sources said, adding that it was not immediately clear how long this will last given payment may not be guaranteed.
Japan's largest refiner, JX Nippon Oil & Energy, the second-largest buyer of Iranian oil in Japan, has maintained its crude purchase transactions with Iran as of Thursday, a company spokesman said.
A spokesman for Showa Shell, the biggest buyer of Iranian crude in Japan, said the company is closely watching over the suspended transactions by the Tokyo-Mitsubishi UFJ bank, but declined to elaborate.
A source with another Japanese buyer of Iranian oil said that, if transactions of payments for Iranian oil have been suspended, his company would not want to take Iranian crude cargoes.
A Cosmo Oil spokesman said Thursday the company has not seen any impact on its crude loadings from Iran as a result of the bank's move, as it has not yet taken any Iranian crude cargoes under a renewed contract effective from April.
An Idemitsu Kosan official said Thursday that the company is confirming facts about the bank's move and will maximize its efforts to minimize impact from it to the company.
Japan's Bank of Tokyo-Mitsubishi UFJ has filed an appeal with a New York district court over the court's order requiring the Japanese lender to freeze the assets of Iranian banks, a company official said Thursday.
One of the grounds for the appeal, received by the New York court Wednesday US time, is that the order extended to Iranian bank assets within and outside the US. The appeal questions the court's jurisdiction over assets held outside the US.
Officials from Bank of Tokyo-Mitsubishi UFJ told Platts earlier Thursday that the bank had frozen the assets of Iranian lenders following an order to do so by the New York district court early May.
In addition, the Tokyo-Mitsubishi UFJ bank has also suspended all transactions with Iranian banks, the officials said, declining to name the banks or disclose when this was done.
The New York court order earlier this month stems from a 2007 New York court decision ordering Iran to pay about $2.6 billion to the victims of a 1983 bombing of a US marine headquarters in Lebanon, the Japanese bank officials said, adding that Iran has not done so.
NO DECISION ON TERM CONTRACTS
The JX Nippon Oil & Energy spokesman reiterated Thursday that the company has not yet decided whether to renew an April-March term contract to import 10,000 b/d of crude from the National Iranian Oil Company.
JX Nippon Oil & Energy has another crude term contract with Iran's NIOC to import 80,000 b/d over January-December.
The Showa Shell spokesman declined to comment on whether the company had renewed its contracts, which expired at the end of March. Showa Shell was importing 100,000 b/d under those contracts.
However, he did say Showa Shell's purchase volumes would be reduced as part of the US-Japan agreement earlier this year to reduce the country's crude purchases from Iran in exchange for a waiver from US financial sanctions that would have barred Japanese banks from the US financial system.
Japan's contractual volumes from Iran are set to drop from slightly more than 300,000 b/d until end-March to around 240,000 b/d after April as Showa Shell and Cosmo Oil have renewed their contracts with NIOC effective in April, but at lower volumes.
So far, the collective cuts in Iranian crude import volumes under the renewed contracts from year-ago levels amount to around 50,000 b/d, Platts has reported.
The Idemitsu Kosan official also said Thursday it has renewed its crude import contract with the National Iranian Oil Company effective from April.
The Idemitsu Kosan official, however, declined to elaborate on its import contract under the renewed contract.
On April 19, Idemitsu Kosan Chairman Akihiko Tembo told reporters that the company expected to cut "at least a small volume" in its new Iranian contract yet to be signed from the 6,000 b/d it had been importing under the previous deal, which expired at the end of March.