Japan's trade and foreign ministers said on Tuesday they have not yet reached an agreement with Washington on how much Tokyo will cut Iranian crude imports to win waivers from U.S. sanctions designed to starve Iran of oil revenue.

 

The Yomiuri newspaper, citing unidentified sources, said Japan and the United States reached an agreement at talks last week, with a formal deal expected by the end of this month.

 

An agreement on lowering oil imports is essential to protect the Japanese financial sector's operations abroad, but it poses a risk to Japan's economy as reliance on energy imports has increased since last year's earthquake and tsunami triggered the Fukushima radiation crisis, leading to most of Japan's nuclear reactors being kept out of use.

 

"We are closely negotiating with the United States and are moving forward towards mutual understanding, but it is not the case that we have reached a conclusion," Trade Minister Yukio Edano told reporters.

   

The United States says it will punish financial institutions that deal with Iran's central bank, the main clearing house for oil revenues. A country can earn a waiver from the sanctions if it significantly reduces trade with Iran.

 

Japan's Foreign Minister Koichiro Gemba also said no agreement has been reached yet. Japan is offering to continue cutting Iranian oil imports but talks are ongoing, a foreign ministry official said earlier.

 

Japan is the third-biggest customer for Iranian oil. It needs to import more oil to make up for declining use of nuclear power after the Fukushima disaster last March triggered the worst nuclear crisis since Chernobyl 25 years ago.

 

Public safety fears have prevented the restart of reactors halted for routine checks, and only two of the nation's 54 reactors are still operating. The last of those is due to be shut down by late April.

 

Japan's top refiner, JX Nippon Oil & Energy Corp, a unit of JX Holdings, said it has not received any instruction from the government on Iranian oil, including the reported 11 percent cut, and whether Japan will win waivers. Two other refiners also had heard nothing, industry sources said.

 

"We are worried because the government is not good at planning ahead," one source at a Japanese buyer of Iranian crude said.

 

By contrast, China and South Korea, the two other big Asian buyers of crude, increased imports from Iran last year.

Japan to win exemption from Iran sanctions by U.S.-media
 

(Source: moneycontrol)