Japan supports U.S. sanctions, pledges to buy less Iranian oil
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REPORTING FROM SEOUL -– Capping a diplomatic huddle in Tokyo with U.S. Treasury Secretary Timothy F. Geithner, Japanese central government officials pledged Thursday to buy less Iranian oil in a nod to Washington’s campaign to sanction Iran over its nuclear program.
Geithner made his breakthrough just a day after meeting with officials in Beijing, who have rejected sanctions against Tehran.
The Iranian ‘nuclear development problem can’t be ignored by the world, so from that perspective we understand the U.S. actions,’ Finance Minister Jun Azumi told reporters after meeting with Geithner.
Japan imports 10% of its oil from Iran, but Azumi said his nation will begin ‘reducing this 10% share as soon as possible in a planned manner.’
Geithner visited China and Japan to win support for the sanctions targeting Iran’s oil industry -– barring financial institutions from the U.S. market if they do business with Iran’s central bank.
In response, Iran has threatened to close the Strait of Hormuz, a move that would block the transit of one-fifth of the world’s oil.
Tokyo has acquiesced to previous U.S. pressure to limit its dealings with the Iranian energy sector. With almost no domestic fossil fuel production, Japan aggressively pursues joint oil and gas ventures overseas, and its state-owned exploration company, Inpex, had planned to be a major developer of Iran’s Azadegan natural gas field.
But facing the prospect of being denied access to U.S. financial institutions, Inpex abandoned its stake in the project in 2010.
The most recent U.S. request poses a dilemma for Japan and South Korea, both close allies of Washington but heavily dependent on imported fuel. For Japan, adhering to a new round of U.S. sanctions on Iran would imperil that crucial energy source at a time when Japan’s nuclear industry is in retreat following the March earthquake and tsunami that closed the Fukushima Daiichi atomic power plant.
But experts predict that Japan may be able to offset any oil reductions by increasing imports from other major producers, such as Saudi Arabia and the United Arab Emirates.
The South Korean media reported Sunday that Seoul officials were considering reducing imports of Iranian oil to 2010 levels.
In Tokyo, Geithner told reporters that Washington was working closely with ‘countries around the world to substantially increase the amount of pressure we bring on Iran.’ He added that the effort was still ‘in the early stages.’
‘We very much appreciate the support Japan has provided in standing with us and the international community in support of this very important strategic objective,’ he added following the hourlong meeting with Japanese officials.
-- John M. Glionna