Japan Banks Set to Resume Iran Oil Transactions

EghtesadOnline: Major Japanese banks are set to resume Iranian oil transactions after receiving final regulatory clearance, paving the way for the country's refiners to begin loadings as early as this month, sources with direct knowledge of the matter told S&P Global Platts Tuesday.

News ID: ۷۴۶۵۰۵

16 January 2019

The Japanese banks will be able to issue letters of credit for relevant deals after the clearance from the Japanese and US regulatory authorities, one of the sources who spoke on condition of anonymity said.

These banks are expected to accept payment by Japanese refiners for importing Iranian barrels mainly in yen, the source added.

Japanese refiners and shipping companies have recently clarified their concerns over relevant shipping insurance, Financial Tribune reported.

Japan's JXTG Holdings intends to resume loading oil from Iran at the end of January, while Cosmo Oil aims to load around 1.8 million barrels of Iranian crude at the end of this month upon final clearances, the presidents of the companies told Platts on January 7.

"We hope to resume [Iranian oil imports] as soon as possible," said Tsutomu Sugimori, president of JXTG Holdings, the parent of Japan's largest refiner, JXTG Nippon Oil & Energy. "As we see Iran as an important crude source, we intend to resume [the loadings] immediately as soon as it is clear to do so."

Shunichi Tanaka, president of Cosmo Oil, said it was awaiting final clearance from Japanese banks before moving ahead to resume loadings from Iran, after having its shipping insurance concerns clarified.

Spokesmen at JXTG Nippon Oil & Energy and Cosmo Oil said Tuesday that that the refiners are still preparing for the resumption of Iranian oil imports.

Japan was among eight countries to receive a 180-day waiver from US sanctions. The waiver expires in early May, when the country will be expected to cut purchases significantly. However, a lack of clarity over rules for shipping insurance had meant Japanese refiners were avoiding loadings of Iranian oil for January despite the waiver.

Japan did not import any crude from Iran in November. The country last recorded zero Iranian oil imports in July 2012 during the last international sanctions against Tehran. There was a brief suspension of loadings from Iran until the introduction of government-backed shipping insurance for protection and indemnity cover.