JXTG Holdings <5020.T>, Japan’s biggest oil refinery operator, is considering whether to resume Iranian oil purchases after Japan was granted a waiver from U.S. sanctions targeting Iran, Senior Vice President Yasushi Onoda said on Wednesday.
If it decides to resume purchases after taking into account the economics of Iranian oil against other grades, the company might be able to nominate crude from Iran for December loading at the earliest, he told reporters during a briefing on JXTG’s six-month earnings.
“We do not have concrete plans for resumption,” he said, adding that loading and ship transport from Iran to Japan would take about a month.
The government gave the go-ahead for resuming Iran oil imports, but did not give any information on the volumes that would be allowed, he said.
JXTG said in May that Iranian oil accounts for 4 percent to 5 percent of its total imports. Onoda said the halt in Iran oil imports has narrowed its flexibility for oil procurement, but it has been able to procure replacement oil with no impact to stable oil supplies to Japan.
Onoda said it cancelled loadings of Iranian oil for October ahead of the start of U.S. sanctions in early November. Considering that the United States gave the exemption until early May, JXTG might have to halt Iran oil purchases again from next April, he indicated.
He added that it looked as though JXTG was likely to overcome any issues with payment, insurance and vessels for resuming Iran oil imports.
Spokesman for other Iranian crude buyers Showa Shell Sekiyu KK <5002.T> and Fuji Oil Co <5017.T> said the companies may consider resuming purchases.
The United States granted exemptions to Iran’s biggest oil clients – Japan, China, India, South Korea, Taiwan, Italy, Greece and Turkey – which allow them to import at least some oil for another 180 days.
Japan joined South Korea in temporarily halting Iranian oil loading around mid-September.
The country imported about 172,000 barrels per day (bpd) of Iranian crude in 2017, down 24.2 percent from 2016, trade ministry data showed. That accounted for 5.3 percent of total crude imports.