Japan's US$2 billion deal to develop an Iranian oilfield is causing friction with the US, but Washington's key Asian ally is betting its staunch support on other security issues will limit any impact on bilateral ties.
Japan, which relies on the Middle East for almost all its oil, has been juggling its desire to develop Iran's Azadegan oil field with pressure from the US to back off because of concerns that Tehran is developing nuclear weapons.
Washington was quick to express its "disappointment" that the controversial deal had gone ahead, but Japanese government officials said yesterday the US reaction came as no surprise.
"We hadn't expected the United States to say `well done' about this agreement. But we had explained our national situation -- that Japan has to secure stable energy," said Tetsuhiro Hosono, an official at the Ministry of Economy, Trade and Industry.
Japanese Prime Minister Junichiro Koizumi probably calculated that his close ties with US President George W. Bush and his decision to send troops to Iraq despite voter opposition had won him leeway to act on the deal with Japan's third-largest oil supplier, diplomatic analysts said.
Koizumi last month began deploying troops to help rebuild Iraq in Japan's biggest and riskiest overseas mission since World War II, involving some 1,000 personnel.
"Clearly, Japan's action in this matter is not based on distancing itself from the alliance," said Tokyo University political scientist Takashi Inoguchi.
"They are saying that this range of freedom should be allowed given their commitment and loyalty to the United States," he said. "I think the Japanese calculation may be correct, but we don't know how the action will impact the alliance."
Japan's top government spokesman, Yasuo Fukuda, welcomed the signing of the contract, which capped four years of tough negotiations and reinvigorated Iran's drive for investment.
"I think it is good if this leads to a stable energy supply, Fukuda told a news conference.
He added that Japan was well aware of US concerns and would keep urging Iran to abide by resolutions of the UN nuclear watchdog, the International Atomic Energy Agency.
Iran has consistently denied seeking to build nuclear weapons and agreed last October to allow snap inspections of its atomic facilities and to halt temporarily uranium enrichment.
How much friction develops between the US and Japan will likely depend on Iran's actions on the nuclear front.
If Iran resumes uranium enrichment, the US "may need to put pressure on Iran and if Japan is providing resources, that could be a problem," said US political scientist Joseph Nye. "Bush would probably want to draw down political credits with Koizumi and there could be some friction."
Nye, dean of Harvard University's Kennedy School of Government, added: "It's not a cause for divorce, but it's a cause for a dispute within the family."
Asked by reporters how Japan would respond if Iran did not keep its nuclear promises, Vice Trade Minister Seiji Murata said: "We would have to deal with that on a case-by-case basis."
Tokyo's pledge to keep pressing Iran to live up to its IAEA commitments could weigh in its favor when Washington considered whether to implement the Iran-Libya Sanctions Act, designed to discourage non-US firms from investing in those countries, analysts said.
The US has never tried to implement the law.
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