Energy
0

Japan to Seek Exemption From US Sanctions on Iranian Oil

Iranian imports account for around 5% of Japan’s total crude oil imports.Iranian imports account for around 5% of Japan’s total crude oil imports.

Japan could seek some kind of exemption from the returning US sanctions on Iranian oil exports, as its companies don’t want to abruptly stop importing Iranian crude, an official at Japan’s Ministry of Economy, Trade and Industry said on Wednesday.

The country had an exemption from the previous round of sanctions by the US and the EU earlier this decade, Daisuke Hirota, principal deputy director at METI’s oil and gas division, told S&P Global Platts.

“We will try to continue to get the exemption from the US again to keep this amount of imports from Iran.”

Still, Japan needs to clarify what the US position on the matter is and is in touch with the US government on this.

“The situation in the US government is drastically changing every day. Now we are collecting information and keep in touch with the US government,” he said.

Hirota noted that Japanese refiners value Iran’s relatively low-cost crude because of its heavier qualities.

"Iranian imports account for around 5% of Japan’s total crude oil imports," he said.

“We need to continue to keep imports, and to keep imports from Iran we need to get information and communication with the US government.”

According to S&P Global Platts, calculations based on data by Japan’s METI, Japanese oil imports from Iran plunged 24.2% to average 172,216 bpd in 2017, down from 227,142 bpd in 2016.

In January and February this year, Japanese imports declined 12.3% annually to 192,289 bpd.

According to Ehsan Khoman, the head of research for Middle East and North Africa at Mitsubishi UFJ Financial Group, while China and India may have more wiggle room to continue buying Iranian oil, US allies South Korea and Japan may comply with the renewed sanctions.

“Japan and South Korea may comply with the proposed US reimposition of Iranian sanctions on the concern of losing the US security umbrella vis-a-vis North Korea,” Khoman told Reuters on the day after the US withdrew from the Iran nuclear deal.

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com