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Japan’s METI minister says up to refiners to decide on Iran oil imports

Japanese refiners need to make their own decisions regarding their imports of Iranian oil, Minister of Economy, Trade and Industry Hiroshige Seko said Tuesday when asked at a news conference if the government had provided any guidance to refiners.

“I understand that this would basically, properly be judged by private companies,” Seko said in response to a question about whether the government had provided any guidance to local refiners, which are increasingly facing difficulty maintaining their Iranian oil imports ahead of looming US sanctions.

Seko’s comments came at a time when local refiners have urged the government to seek a US waiver on Iran sanctions as they are keen to continue importing the usual volumes instead of reducing inflows.

Japan is seeking an early exemption to US sanctions on Iran as among its highest priorities for national energy security, as well as for local refiners that need Iranian oil, according to METI’s director-general of oil, gas and mineral resources Ryo Minami.

On Tuesday Japanese refiners said the companies were still carefully monitoring the government’s ongoing negotiations with the US over Iran sanctions.

Japan and the US held the second round of talks on the US’ Iran sanctions in Washington over August 1-2, when the two sides agreed to continue their bilateral discussions.

“We expect to comply with the Japanese government’s guidance, following the bilateral talks but we have not received any specific instructions,” a spokesman for Japan’s largest refiner, JXTG Nippon Oil & Energy, said Tuesday.

“We are currently considering our response,” the spokesman said, declining to elaborate further.

Showa Shell, Idemitsu Kosan and Cosmo Oil on Tuesday declined to comment on their Iranian oil import policy.

US sanctions on Iran’s oil customers resume November 4 and could remove up to 1 million b/d of global oil supply.

Japan’s oil imports from Iran surged in May and June as refiners rushed to secure as many cargoes as possible before US sanctions go back into force. This helped cut Japan’s year-to-date decrease in Iranian oil imports to just 3% from a year earlier, compared with a cumulative 13% drop over January-April.

Over January-June, Japan imported an average of 162,222 b/d of Iranian oil, down 2.7% on the year, accounting for 5.3% of total crude imports, compared with 153,074 b/d imported over January-April, when Iranian supplies accounted for 5.0% of total supply and were down 13.1% year on year, according to METI data.

Source: Platts

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