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Saudi Energy Minister Khalid al-Falih discussed on Monday how Saudi Arabia could meet Japan’s petroleum requirements in a meeting with the Japanese minister for economy and trade.
The two officials met in the United Arab Emirates (UAE) today, and al-Falih told reporters the issues they discussed included Japan’s energy security and how the Saudis could help Japanese oil needs.
Japan, which imports almost all of the oil it consumes, was a regular customer of oil from Saudi Arabia’s regional archrival Iran, before the U.S. sanctions on Iran’s oil industry returned.
As a close U.S. ally, Japan significantly slashed its oil imports from Iran before the sanctions snapped back on November 5, hoping to win a U.S. waiver to continue importing Iranian oil at reduced volumes until the waiver expires in early May 2019. Japan did get a waiver, together with seven other Iranian oil buyers, including the two biggest—China and India.
Japan wants to ensure enough energy security and will try to keep importing Iranian oil, but at the same time it doesn’t want to vex the U.S. Administration.
“Even though Japan wants to preserve the JCPOA, it cannot afford to antagonize the US administration considering the current unstable security environment,” Sachi Sakanashi, a senior research fellow at the JIME Center, Institute of Energy Economics, Japan (IEEJ), wrote in a post on the Atlantic Council on Monday.
Two Japanese refiners, JXTG and Cosmo Oil, plan to resume buying Iranian oil at the end of this month, their respective presidents told S&P Global Platts last week. “Various procedures” regarding the resumption of imports could push the loadings from January to February, Tsutomu Sugimori, the president of the parent company of Japan’s largest refiner, JXTG Nippon Oil & Energy, told Platts.
The president of the Petroleum Association of Japan (PAJ), Takashi Tsukioka, said last week that the industry would continue to call on the Japanese government to work on securing an extension to the U.S. waiver after it ends in May.
However, Japan’s efforts for waiver extension may fall on deaf ears. The U.S. Special Representative for Iran, Brian Hook, said over the weekend:
“We are not looking to grant any waivers or exemptions to the import of Iranian crude.”
By Tsvetana Paraskova
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.