Japan Comeback to Revitalize Oil Trade

Japan Comeback to  Revitalize Oil TradeJapan Comeback to  Revitalize Oil Trade

Iranian and Japanese officials discussed the prospects of raising crude exports in a meeting to mark 40 years of bilateral oil trade at the Japanese Embassy in the capital.

The meeting was attended by Seyyed Mohsen Qamsari, director of the National Iranian Oil Company, and Japan's newly appointed Ambassador in Tehran, Hiroyasu Kobayashi, alongside Takashi Matsushita, a managing director of the Japanese petroleum company Idemitsu Kosan Co.

The two sides reportedly reached an agreement to raise crude exports to Japan once oil and trade embargoes against the Islamic Republic are lifted. The framework of the agreement was not disclosed, Mehr News Agency reported.

"Tehran-Tokyo oil trade is now 40 years old. We went through a lot to establish such relations and it could not be realized without mutual trust," he said.

"Iran looks to secure win-win deals in the oil sector."

Qamsari described as "especially important" for NIOC the recent consolidation efforts of Idemitsu in the Japanese energy market.

Idemitsu, Japan's second-biggest oil refiner, said in July it would buy a one-third stake in refiner Showa Shell Sekiyu from the Royal Dutch Shell in a multimillion-dollar deal.

He hoped the merger would result in producing a wider range of petroleum products by the Japanese firm and consequently raise demand for Iranian crude.

The Japanese ambassador also said Idemitsu laid the cornerstone of "the first direct transit route for Iranian oil to Japan" four decades ago. The aging population and spread of eco-friendly vehicles have squeezed Japan's oil industry over the past decade.

Kobayashi said the imminent lifting of sanctions and its coincidence with the 40th year of Iran-Japan oil trade mark the opening of a new chapter in relations between two countries who have always maintained cordial relations in recent history.

Iran and six world powers reached a historic deal on July 14 in Vienna, which would limit the Persian Gulf country’s nuclear program in return for removing sanctions on its energy and financial industries.

Matsushita called on the two sides to look beyond oil trade and explore areas of cooperation in the import and export of petroleum products and services.

Japanese Delegation

Japanese Foreign Minister Fumio Kishida's is expected to arrive in Tehran on Monday along with representatives from 22 companies active in the energy, automotive, engineering, medicine and education sectors to explore lucrative deals in the Iranian energy market.

The Japanese delegation's visit comes at the heels of a meeting between Iranian President Hassan Rouhani and Japanese Prime Minister Shinzo Abe on the sidelines of the United Nations General Assembly in New York last week.

In August, Japan's State Minister of Economy, Trade and Industry Daishiro Yamagiwa traveled to the Iranian capital in August to rekindle business ties. Major European countries such as Spain, the Netherlands, Austria, France and Germany have also sent delegations to Iran after the landmark nuclear agreement in mid-July.

One of Japan’s key targets in the Persian Gulf state is the Azadegan Oilfield near the Iraqi border, which holds an estimated 30 billion barrels of oil in reserve.

Tokyo has been interested in working with Tehran to develop the oilfields for the past two decades and at one point, in 1996, had a nearly 75% stake in the southern Azadegan field through Inpex, a Japanese oil company.

Japan imported 10% of its oil from Iran in 2000, but sanctions have cut that figure to roughly 5% in 2014. The East Asian state's oil imports from Iran averaged 172,800 barrels per day in the first half of 2015, according to Japan’s Energy Ministry.