JJapan's imports of Iranian crude oil fell to zero in July
Reuters, Tokyo, 31 August 2012 - Japan’s imports of Iranian crude oil fell to zero in July for the first time since 1981, trade ministry data showed on Friday, as Iran’s No.3 oil buyer reined in its appetite to keep from falling afoul of European Union sanctions targeting insurance.
The data had been anticipated as Japanese buyers stopped lifting Iranian crude from early in June until late in July so that vessels on the final leg of the journey to Japan would not be left uninsured in early July, after an EU ban on insurance of Iranian cargoes took effect.
To compensate, Japan increased imports from the United Arab Emirates and Iraq, among other suppliers.
July was the first time that Asia’s second-biggest user of crude did not import the fuel from Iran since January and February 1981, when imports were temporarily halted in the wake of the Iran-Iraq War, an official with the Ministry of Economy, Trade and Industry (METI) said.
The trade ministry data differed from customs-cleared figures issued on Thursday showing Japan last month imported 126,726 barrels per day from Iran, down 52.5 percent from a year ago, but the oil industry takes the METI data as a benchmark because it tracks the actual import status of oil tankers.
Thursday’s data from the Finance Ministry may have reflected a delay in customs clearance of one or more cargoes that arrived in late June or earlier. South Korea also unexpectedly reported that it imported Iranian crude in July, which was attributed to shipment delays in June cargoes.
Crude imports from Iran fell 38.7 percent in the first seven months of the year to 6.94 million kl (204,931 barrels per day), calculations based on the trade ministry data showed, despite an increase in Japan’s demand, driven by a sharp gain in fuel oil sales for power generation because of a crippled nuclear sector.
The nation’s crude imports from Iran have resumed this month as Japan’s government stepped in to provide a sovereign guarantee of up to $7.6 billion for shipments to keep the oil trade with Tehran going.
Japan joined South Korea among top Asian buyers in temporarily halting all Iranian imports due to EU sanctions that aim to cut Iran’s oil revenues and force Tehran to curb its nuclear programme, which the West fears is aimed at developing a weapon. Iran has denied such a motive.
Japan has already scaled back its purchases of Iranian crude to ensure an exemption from U.S. sanctions, which target financial institutions dealing with Iran’s central bank. The U.S. measures came into effect in late June.
The United States gave Japan a waiver of those sanctions in March after the Asian country cut import volumes of Iranian crude.
Japan is the only country to date to offer sovereign guarantees on shipments, while South Korea has announced that it will resume Iranian imports from September, shifting to Iran the responsibility of insurance and relying on the Middle Eastern country to use its own tankers to deliver oil, following in the footsteps of China and India.
Tehran offered to provide up to $1 billion of insurance cover to Iranian vessels shipping oil to South Korea as Iran has a major interest in keeping its crude flowing to South Korea, China, India and Japan - its top four customers. (Reporting by Osamu Tsukimori and Risa Maeda; Editing by Clarence Fernandez)