Japan said Wednesday it would continue to cut its oil imports from Iran “considerably,” while hailing a U.S. decision to exempt it from new sanctions against doing business with the nuclear aspirant.
“We have explained to the U.S. side that this trend will accelerate in the future and that we will carry out our reductions considerably,” Chief Cabinet Secretary Osamu Fujimura told reporters.
Fujimura did not elaborate on the planned cuts, but Japan’s Economy, Trade and Industry Minister Yukio Edano said that Tokyo has already reduced its Iran oil shipments by 40 percent over the past five years.
The United States on Tuesday said it was exempting Japan and some European Union members from tough new sanctions aimed at pressing Tehran over its nuclear program.
Japanese Finance Minister Jun Azumi described the U.S. decision as “an achievement of negotiations.”
“I believe the United States welcomes Japan’s response, including actions it will take in future (to cut imports),” he told reporters on Wednesday.
Last year, Iranian oil accounted for about 8.8 percent of Japan’s crude imports, according to the Petroleum Association of Japan, which totaled 3.6 million barrels a day.
Japan buys about half its oil from Saudi Arabia and the United Arab Emirates, but Edano warned that “imports of Iranian crude won’t become zero immediately.”
The U.S. sanctions bar financial institutions that do business with Iran from operating in the United States, effectively making them choose between the Islamic republic and the world's largest economy and banking superpower.
Japan pressed hard for an exemption from the sanctions, noting that its energy shortfall after the Fukushima nuclear crisis a year ago led it to shut down most of its atomic plants.
Japan ̶ which has virtually no fossil fuels of its own ̶ has historically maintained cordial relations with Iran. But Japan has pared down its investments in the Islamic republic in recent years over the nuclear concerns.
Akio Shibata, president of the Tokyo-based National Resource Research Institute, said Japan was not facing a severe supply shortage, but the sanctions would likely push up oil prices, hurting the region's energy-hungry economies.
“I can’t say to what extent the prices will increase, but that will of course have a negative impact on the Japanese economy, as costs of everything from manufacturing to farm products will increase,” he told AFP.
“Asian countries will be particularly hit by the potential effects of the U.S. sanctions,” he added.
Iran says that its nuclear program is meant for peaceful purposes, but Israel and a number of Western countries fear that the regime is trying to build a nuclear bomb.
Secretary of State Hillary Clinton said that Washington would exempt financial institutions from 11 nations ̶ Belgium, Britain, the Czech Republic, France, Germany, Greece, Italy, Japan, the Netherlands, Poland and Spain.
“The actions taken by these countries were not easy,” Clinton said in a statement.
“They had to rethink their energy needs at a critical time for the world economy and quickly begin to find alternatives to Iranian oil, which many had been reliant on for their energy needs,” she said.