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EghtesadOnline: Japan is seeking an early exemption from the US on its sanctions against Iran as among the highest priority for the country's energy security as well as local refiners' need for Iranian oil, a top government official told S&P Global Platts Tuesday.

"Our principle is to get the exemption firmly," Ryo Minami, the newly appointed director general of oil, gas, and mineral resources at the Ministry of Economy, Trade and Industry said in an interview. Asked if Tokyo seeks to secure the exemption by November 4, "it would be the sooner the better to get it", he said.

"We have a request from the US to suspend oil imports from Iran but we see Iran as an extremely important country for ensuring Japan's energy security," said Minami, who took the helm of METI's Natural Resources and Fuel Department on July 13 after having previously been director of the ministry's oil and gas division from December 2012 to July 2015.

Minami said stopping all Iranian oil exports could result in the loss of around 2.5 million bpd of global oil supply, which cannot be absorbed and would trigger a "substantial rise" in oil prices that would not benefit anyone. "As Japan considers to continue importing crude oil, we intend to tell the US this stance and we aim to secure their understanding," he said. While noting Japan's reduction in Iranian oil imports in recent years, Minami added that Japan should be exempt from US sanctions, according to Financial Tribune.

Japan imported an average of 165,481 bpd of Iranian oil in the fiscal 2017-18 (April-March), down 28% from the previous fiscal year. Iranian imports accounted for 5.2% of Japan's total crude imports of 3.19 million bpd in the fiscal year ended March 31, according to METI data. "Certainly, we have requests from Japanese companies to negotiate with the US over Iranian oil imports," Minami said, stressing that this issue has elements of energy security policy and an impact on Japanese businesses.

Speaking at a news conference on Thursday, Tsukioka called for the Japanese government to make an "earliest possible decision" over its response to the US sanctions on Iran, as refiners are making their preparations for lifting Iranian oil based on various scenarios. Asked if Japanese refiners face difficulty continuing to import Iranian oil if the government makes no decision in August, Tsukioka confirmed that the refiners would "temporarily" face it, adding that it would be "inevitable to have some impact" on their procurements.

 

Japan US sanctions US Waiver energy security