Oil companies are planning to make up for the shortfall by increasing purchases from other Middle Eastern suppliers, such as Saudi Arabia, since imports of Iranian crude will likely stop by around October, the sources said, Kyodo reported.
For consumers in resource-poor Japan, the change would mean higher prices for gasoline and related products due to higher procurement costs, according to Financial Tribune.
The average retail price for a liter of regular stood higher than ¥150 as of Tuesday, hitting its highest in three and a half years, the Agency for National Resources and Energy reported.
The suspension also comes amid the prospect that transaction settlements will be made difficult because major banks like MUFJ Bank and Mizuho Bank are considering halting Iran-linked businesses following the US decision to reinstate sanctions against Tehran.
Crude oil from Iran, which traditionally has stable diplomatic relations with Japan, is relatively cheap compared with oil from other countries. It accounts for around 5% of Japan’s annual crude oil imports. The US has been calling for a halt to oil imports from Iran by Nov. 4. Some countries such as China have rejected US calls and Japan is seeking a waiver.
US Secretary of State Mike Pompeo indicated earlier this month that Washington will consider requests from some countries that they be exempted from the US-led ban but it remains uncertain whether Japan will be given an exemption.
US President Donald Trump has hardened his stance toward Iran and withdrawn his country from an international nuclear weapons agreement.
Under the 2015 deal struck between Iran and six major powers — Britain, China, France, Germany, Russia and the United States — Tehran agreed to curb its nuclear activities in exchange for the removal of crippling economic sanctions.