Japan's parliament approved government guarantees on insurance for crude oil cargoes from Iran on Wednesday, paving the way for it to become the first of Iran's big Asian oil buyers to get round new European Union sanctions, Reuters reported.
Last month IEA said Iran's oil exports have decreased from 2.5 mbd to less than 2.0 mbd, and this figure is expected to fall even further to 1.5 mbd in the second half of 2012.
The law will take effect on June 27, a government official who requested anonymity said on Tuesday.
It allows the Japanese government, which has succeeded in getting a waiver from U.S. financial sanctions, to provide cover of up to $7.6 billion for each tanker carrying Iranian crude bound for Japan in the event of accidents.
An EU ban on member countries importing Iranian oil takes effect on July 1 and includes a ban on EU insurance firms from covering Iran's exports.
That is a headache for Japan, South Korea, China and India, which together buy two-thirds of Iran's oil exports and rely on EU companies to insure them.
EU and U.S. sanctions aim to cut the oil revenues on which Tehran depends to force it to curb its nuclear program. The West suspects Iran's aim is to develop nuclear weapons, while Tehran says it needs reactors to provide electricity.
Iranian oil accounted for nearly 9 percent of Japan's crude imports last year. Japan has reduced the flow already to comply with U.S. sanctions requiring buyers to make sizeable cuts, but wants to avoid more drastic reductions that could drive up energy import costs and hurt the world's third-largest economy.
Refiners have cut their purchases even though Japan needs more oil to fuel power stations after last year's Fukushima disaster led to a halting of reactors providing nuclear power.
It is the first time Japan has sought to provide guarantees on marine shipments, an official in the country's transport ministry, which sponsored the legislation, said earlier.
China, Japan, India and South Korea have cut purchases by about a fifth from the 1.45 million bpd they were buying a year ago ahead of the imposition of the sanctions.
Edited by: S. Isayev