Amid record-high U.S. crude oil…
The world’s best-performing IPO stock…
Oil trade and the U.S. sanctions on Iran’s oil industry will likely be part of the discussions that Japan’s Prime Minister Shinzo Abe will hold with Iran’s officials on the first visit of a sitting Japanese premier to Iran since the 1979 Islamic Revolution.
U.S. ally Japan will officially mark 90 years of diplomatic relations with Iran. Some analysts see Japan’s Abe as a possible mediator in trying to de-escalate tensions between the United States and Iran, while Iran is reportedly hoping that the Japanese prime minister could mediate between Tehran and Washington for easing of the strict U.S. sanctions on Iranian oil exports that are crippling the Islamic Republic’s economy.
Japan, which used to import roughly 5 percent of its oil from Iran in recent months, was one of the eight countries to which the U.S. had given special exemptions to continue buying Iranian oil for six months after the oil sanctions snapped back in November last year.
The United States, however, pursued a maximum pressure campaign against Iran and put an end to all sanction waivers for all Iranian oil buyers, beginning in May. Japan obliged and stopped importing oil from Iran. During the window of the sanction waivers between November and April, Japan imported oil from Iran only in February, March, and April this year, with April imports plunging 42 percent from March, to 169,100 bpd.
Although Japanese refiners have stopped importing oil from Iran, they hope that Japan’s government could work toward a possible resumption.
Related: Saudi Arabia Vows To Prevent Oil Crash
“We hope (the Japanese government) will make strenuous efforts so imports can be resumed,” The Japan Times quoted Takashi Tsukioka, the head of the Petroleum Association of Japan, as saying at a recent press conference.
Meanwhile, a senior Iranian official tells Reuters that Iran would ask Japan to be the mediator of some kind of indirect dialogue to ease the U.S.-Iran tensions and ease the U.S. oil sanctions.
“Japan can help in easing the ongoing tension between Iran and America... As a goodwill gesture, America should either lift the unjust oil sanctions or extend the waivers or suspend them,” the official told Reuters.
Analysts who spoke to the BBC say that the chances of Japan’s Abe to achieve anything as a mediator are close to zero, while Japanese officials have discouraged reporters and analysts from reading too much into the prime minister’s ‘mediator’ role.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.