Japan pledged yesterday to take concrete action to cut Iranian oil imports in response to an appeal for support from visiting US Treasury Secretary Timothy Geithner, as Washington steps up efforts to sanction Tehran over its disputed nuclear program.
Geithner welcomed Tokyo’s cooperation, an encouraging sign for US foreign policy after China rebuffed US sanctions aimed at starving Iran of the oil revenues that provide the country of 74 million people with a vital economic support.
Iran faces the prospects of cutbacks in oil sales to China, Japan and India, its top three buyers, who together take more than 40 percent of its crude exports. The EU, a major buyer, has committed to banning imports of Iranian oil.
Japanese Minister of Finance Jun Azumi said Iranian crude makes up 10 percent of Japan’s overall oil imports.
“We would like to take action concretely to further reduce [that] in a planned manner,” he said after meeting Geithner. “On the other hand, we need some time in non-crude oil related areas, so I asked the secretary to take Japan’s situation into consideration.”
Cutting Iranian crude imports would not be without risks for Japan. It relies on imports for its energy needs and has to import more fuel to make up for waning use of nuclear power following last year’s nuclear power plant disaster in Fukushima Prefecture.
“It would cause immense damage if they were cut to zero,” Azumi said in a news conference, referring to Japan’s Iranian imports.
Anxiety over Iran’s nuclear program, which it says is not for military use, could also push up oil prices and harm the global economy.
Indeed, Japanese Prime Minister Yoshihiko Noda voiced concern to Geithner about the potential impact of the US sanctions on Japan and the world economy.
Japanese Chief Cabinet Secretary Osamu Fujimura, the government’s top spokesman, later tried to soften Azumi’s pledge to reduce Iranian oil imports, saying it was one of many options under consideration.
US President Barack Obama authorized a law on Dec. 31 imposing sanctions on financial institutions that deal with Iran’s central bank, the country’s main clearing house for oil payments.
Japan’s government hopes to secure a waiver from the sanctions for Japanese banks by reducing Iranian crude imports, something it has started discussing with the domestic oil industry, the Yomiuri newspaper reported.
However, sources at two major Japanese oil refiners using Iranian crude said they had not been approached by the government.
Azumi didn’t elaborate on what he meant by “non-crude oil related areas,” but one potential issue is its repeated intervention to weaken the yen to boost exports.
Azumi said he had meaningful discussions on currencies with Geithner, but declined to reveal the details. Geithner also declined to comment on Japan’s intervention.