The Japanese government probably wants Idemitsu Kosan to continue cutting Iranian crude imports as before, which is by 10 to 20 percent a year, the oil refiner's chairman said on Wednesday, a day after the United States exempted the Asian nation from financial sanctions, Reuters reported.
Each oil firm in Japan that buys Iranian oil has been in separate talks with the government on curbing oil imports from the Middle East nation, but the government has not instructed them to attain a detailed percentage figure for cuts.
"I know only about my own firm, but I think (the government) wants us to continue the level of reduction that we have done up to now," Akihiko Tembo, head of the Petroleum Association of Japan and chairman of Idemitsu Kosan Co, told reporters.
"Simply put, I think it means to reduce (imports) by 10 to 20 percent (per year that Idemitsu has reduced over the years)."
Tembo also said Idemitsu would cut its Iran imports from April in line with the government's policies, but added it has not decided on a specific percentage for cuts.
Tembo welcomed the U.S. decision on the waiver, but said the problem with the European Union's proposed ban on EU insurers and reinsurers from indemnifying vessels carrying Iran's oil anywhere in the world still remains unresolved, saying that he would carefully watch the developments over the matter.
Japan is estimated to have reduced oil purchases from Iran by 15-22 percent in the second half of last year, a move lauded by the United States, which on Tuesday decided to give a six-month reprieve to banks in Japan and 10 EU nations from the threat of being cut off from the U.S. financial system.
"We have told the U.S. side that the trend of decrease would accelerate and Iranian crude imports will be reduced substantially from now on," Chief Cabinet Secretary Osamu Fujimura told a news conference on Wednesday.
Showa Shell Sekiyu KK, the nation's top buyer of Iranian crude, on Wednesday issued a statement, saying that the company will respect the agreement between Japan and the United States and reduce its Iran imports in line with that.
JX Nippon Oil & Energy Corp, Japan's biggest refiner, said the U.S. announcement was encouraging as the worst case scenario of a full-scale embargo of Iran crude resulting in a hike in oil prices has been avoided, but several unsolved issues remained.
These issues include uncertainty over Tehran's nuclear programme, Washington's review on an exempted country's status every 180 days, insurance and other problems related to actual oil delivery, a JX Nippon spokesman said.
On Tuesday, representatives in Brussels of EU governments debated a proposal to allow all insurance on Iranian crude bound for countries outside the EU to be extended until July 1.
Tehran denies Western charges over its nuclear programme, saying it is for peaceful purposes such as power generation.