UPDATE 2-Japan Imports Iranian Crude in July Even after EU Ban
By Osamu Tsukimori and Risa Maeda
TOKYO, Aug 30 (Reuters) - Japanese crude oil imports from
Iran fell sharply in July, but imports continued despite a halt
in loadings by Japanese buyers to avoid running foul of a
European Union ban on insuring cargoes from the Middle East
nation.
Japanese buyers stopped loading cargoes in early June to
avoid vessels sailing the final part of their journeys to Japan
uninsured after the EU sanctions targeting Iran's nuclear
programme kicked in on July 1.
Japan imported from Iran 126,726 barrels per day last month
(624,585 kilolitres), down 52.5 percent from the same month a
year ago and down 23.1 percent from June, data from the ministry
of finance showed.
The imports may have been due to a delay in customs
clearance on one or more cargoes that arrived in late June or
earlier. South Korea also unexpectedly imported Iranian crude in
July, which was put down to shipment delays in June cargoes.
"I imagine that those June arrivals were counted as imports
for July," a government source said, adding it was inconceivable
that any tankers were sailing in July without insurance cover.
Any ships carrying Iranian oil in July at sea without the
required insurance would have been in breach of the
International Convention on Civil Liability for Oil Pollution
Damage, which Japan and Iran have both ratified.
The cargoes could have arrived earlier since it can take up
to three months to clear customs, a Tokyo-based oil trader said.
Importers can seek customs clearance within three months of
a cargo's arrival or apply to have the crude categorized as
"import for storage" and held for up to two years before being
cleared, a spokesman at Tokyo Customs said.
Japan's Ministry of Economy, Trade and Industry is due to
release its own data on Friday, which could show lower oil
imports. The data is more closely watched by the oil industry
because it provides a better snapshot of trade flows.
Customs-cleared crude imports from Iran fell 35.6 percent in
the first seven months of the year to 212,896 bpd, the Ministry
of Finance data showed.
TRADE UNCERTAINTY
The EU ban on insurance of Iranian cargoes has cast trade
with Iran into uncertainty not seen in decades but Asia's crude
imports from Iran are likely to recover in September to levels
before July 1 when the prohibition started.
China, India, Japan and South Korea, the biggest Asian
buyers of crude, together take more than half of Iran's crude
exports and have worked around the European Union embargo.
Japan started offering sovereign guarantees on shipments
last month, the only country to take such a step, while South
Korea announced a resumption of Iranian imports from September.
In doing so, Seoul asked Iran to take responsibility for
insurance and use its own tankers to deliver cargos, following
in the footsteps of China and India.
Tehran offered to provide up to $1 billion of insurance
cover to Iranian vessels shipping oil to South Korea.
Japan is loading about 226,000 bpd in August, more than
double the amount loaded in July. Oil usually takes around three
weeks to travel from Iran to Japan, so these cargoes will be
accounted as imports in August or September.
Refiners want to continue using the Iranian crude many of
their plants are configured to process, as changes will need
lengthy testing of new grades or alter output.
The United States and the European Union are leading a drive
to stop Iran's suspected pursuit of nuclear weapons with the
sanctions on oil exports, a major source of income. Tehran says
its nuclear programme is peaceful.
The table below shows a breakdown of local customs offices,
which cleared crude imports from Iran in July:
OFFICE CLEARED IMPORTS
Chiba 323,602 kl
Kagoshima 127,039 kl
Kashima 78,193 kl
Mizushima 64,989 kl
Yokohama 30,762 kl
TOTAL 624,585 kl (126,726 bpd)
Source: Ministry of Finance