Japan oil firms cautious over Iran imports

The latest indications show the Japanese companies are cautious about increasing imports of crude oil from Iran even now that the sanctions against the country have already been lifted.

Japan’s media are reporting that the country’s companies had been previously preparing to increase oil imports from Iran last summer. However, the remaining US sanctions against Iran – specifically a ban on settlement in dollars for trade activities with Iran – appear to have been a key factor which is discouraging increased imports from the Islamic Republic.

Nikkei newspaper has reported that imports from Iran have not grown as strongly as expected. According to Japan’s economy and trade ministry, imports rose 11% year on year to 950,000 kiloliters in January when the sanctions were lifted, the daily said. But growth slowed sharply to 1% in February and turned negative in March. In April, imports were down 70% from the previous year, it added.

Nikkei has further quoted Japanese traders as saying that Iran’s crude oil is not “price-competitive”.

The daily reported that the Japanese government had devised a new system to compensate Japanese oil importers for losses resulting from accidents involving tankers carrying Iranian oil. Such losses are usually covered by private reinsurers. For this fiscal year, the government raised the maximum compensation per tanker to slightly over 900 billion yen ($8.92 billion) from around 800 billion yen the previous year. The number of tankers covered by the framework was increased from 15 to 19, Nikkei added.

However, oil importers are still reluctant to go ahead with importing crude oil from due to the complications that still surround any business with Iran, it concluded.

By Press TV