Japan Eyes More Iranian Oil

Japan Eyes More Iranian OilJapan Eyes More Iranian Oil

Japanese refiner Cosmo Oil is looking at the possibility of buying more crude from Iran once sanctions on the Islamic Republic are lifted, company president Hisashi Kobayashi said on Tuesday.

Speaking to Platts on the sidelines of a New Year reception hosted by the Petroleum Association of Japan in Tokyo, Kobayashi said economics will be key for any increase in the refiner's Iranian crude oil imports and imports from the US, but added that "it is possible" it will increase crude imports from Iran in 2016 after the lifting of sanctions.

Kobayashi said the Iranians had asked Cosmo Oil to increase volumes on a term basis, but added that any additional imports from the country would be on a spot basis.

"We do not intend to increase our imports from Iran on a term basis abruptly," Kobayashi said.

Cosmo Oil is likely to renew soon its annual term contract with Iran for the April 2016-March 2017 period at the same volume as the previous year.

He declined to comment on Cosmo Oil's current and prospective Iranian crude import volumes.

Tightened sanctions in effect since mid-2012 have capped Iran's crude exports at about 1.5 million barrels per day of crude because of volume restrictions imposed on Tehran's customers by the United States.

Iran has said it will be able to increase exports by 500,000 bpd immediately upon the lifting of sanctions and by a further 500,000 bpd over the following six months to take export volumes back towards pre-2012 levels of 2.3 million bpd.

Past records show that Cosmo Oil has been one of the more experimental refiners in Japan when it comes to crude imports from diverse suppliers.

It was one of most active Japanese refiners last year buying Kazakhstan's light sweet CPC Blend crude, as well as Mexico's Isthmus crude. In October 2014, Cosmo Oil became the first Japanese refiner to import US shale condensate when it took a 300,000-barrel cargo at its Yokkaichi Refinery in central Japan.