TOKYO (Reuters) - Japan’s crude imports from Iran fell 65.5 percent in April from a year earlier, ahead of deeper declines that may come from July due to the difficulty in doing business with the Islamic Republic as Western sanctions bite.
The double-digit decline was partly because of the timing of shipments clearing customs. Last month, Ministry of Finance trade data showed customs-cleared crude imports from Iran fell only 6.3 percent in March from a year earlier.
Japanese crude buyers are making the cutbacks to comply with sanctions that make it tough to pay for, ship and insure the oil.
The United States and Europe are trying to squeeze the revenues Iran makes from oil exports in order to force it to halt a nuclear program they fear will be used to make weapons, but which Tehran says is for power generation.
Japan will load about 123,000 barrels per day (bpd) in May from Iran, about the same as in April, traders said earlier this month, about 60 percent less than the 305,114 bpd average imports from Iran in the first three months of the year.
April custom-cleared imports were about 119,000 bpd.
The cuts came even after Japan secured in March a six-month waiver from U.S. financial sanctions relating to Iran, and despite an increase in overall oil demand after last year’s Fukushima nuclear disaster.
Still, Iran’s oil exports, which were up to 2.2 million barrels per days last year, have not dropped further in May after falling sharply since March, industry sources said this month, as core customers in Europe and Asia continue to buy ahead of the application of European sanctions.
South Korea imported almost 60 percent more crude from Iran in April than in March, pushing purchases to their highest level this year and reversing a decline that began in January after the United States announced its restrictions against Tehran, official data showed on Tuesday.
China, the world’s second biggest oil consumer and another major Asian buyer of Iranian crude, increased its oil imports from Iran by 50 percent in April compared to March after both sides resolved a pricing dispute.
The European Union’s sanctions on Iran will take effect in July. These are making it impossible for Japanese buyers to find insurance cover for ships carrying Iranian oil because they rely on insurers and reinsurers from Europe, and could severely curtail loading.
Government officials have said Tokyo may provide the cover if its lobbying fails to convince the EU that it should remain exempt from a ban on insurance and reinsurance of Iranian crude imports.
Iran and world powers have agreed to meet again next month to try to ease the standoff over Tehran’s nuclear program despite achieving scant progress at talks in Baghdad.
Wednesday’s custom-cleared data from the Ministry of Finance showed crude imports from Iran in April totaled 564,962 kilolitres (118,450 barrels per day), down 65.5 percent on a year earlier and down 67.7 percent from March’s 1,751,737 kl (355,422 bpd).
Overall customs-cleared crude oil imports rose 12.9 percent from the same month a year earlier to 19.2 million kilolitres (4.0 million bpd), the data showed.
More-closely watched monthly data from the Ministry of Economy, Trade and Industry on the country’s demand and imports of oil is due on Thursday.
The METI figures take into account shipments to refineries and oil terminals and often differs from the customs data.
Reporting by Risa Maeda and Osamu Tsukimori; Editing by Aaron Sheldrick and Richard Pullin