Japan's Idemitsu renews Iran oil deal, cuts volume

Business Materials 18 May 2012 11:22 (UTC +04:00)

Japanese oil refiner Idemitsu Kosan Co has renewed its annual crude oil purchase deal with Iran but cut the volume in line with its peers to comply with U.S. sanctions against the Islamic Republic, industry sources said on Friday, Reuters reported.

The United States and European Union have stepped up measures to reduce Iran's oil trade, aiming to stem the flow of petrodollars to Tehran in a bid to force it to halt a nuclear program the West suspects is intended to produce weapons.

Idemitsu had a term Iranian crude contract worth about 7,000 barrels per day for the financial year that ended in March, the sources estimated.

The volume had been cut for the new contract but the size of the cut was unclear, they said.

Idemitsu Chairman Akihiko Tembo said in March that the Japanese government probably wanted his firm to continue cutting Iranian crude imports at the same rate as previously, which was by 10 to 20 percent a year.

A company spokesman acknowledged the deal had been renewed, but declined to whether the volume had been cut. Iranian oil imports accounted for 1 to 2 percent of the company's crude imports in the year ended March 31, company spokesmen said.

Idemitsu does not release its crude import volumes, but it processed 27.7 million kilolitres (476,000 barrels per day) of crude in 2011/12, a spokesman said.

If the imports were the same as its crude refining, the company's Iran imports would be equal to 4,760-9,520 bpd.

Idemitsu has four refineries in Japan with total crude refining capacity of 640,000 bpd.

Japan's top buyer of Iranian crude, Showa Shell Sekiyu KK , and Cosmo Oil have already renewed their term deals to lift Iranian crude from April, industry sources have said.

Edited by: S. Isayev