Fuji Oil seeks spot crude oil after U.S. sanctions block Iranian supply

Fuji Oil Co (Shinagawa)

09/05/2019 09:20

By Yuka Obayashi
    TOKYO, May 9 (Reuters) - Japan's Fuji Oil Co  5017.T 
expects to secure alternative crude supplies through term
contracts and by tapping the spot market after the U.S. ended
waivers on sanctions on Iran, the company's president said on
Thursday.
    Fuji Oil President Atsuo Shibota said he does not see any
problems in securing oil supplies from sources other than Iran
but he expects they may raise costs by as much as 100 million
yen ($911,000) a month for the company.
    "We are in a situation where we can buy crude from the free
market, so we don't expect supply disruption even without
Iranian oil," Shibota said, declining to say what suppliers they
would tap.
    He was speaking at an earnings press conference in Tokyo.
Takahiko Yamamoto, a director at Fuji Oil, told Reuters after
the press conference that the refiner had already secured most
of its supplies for June, mainly through buying on the spot
market.
    The United States reimposed sanctions on Iran in November
after pulling out of a 2015 nuclear accord between Tehran and
six world powers last year. Those sanctions have already more
than halved Iranian oil exports to 1 million barrels per day
(bpd) or less.
    Washington, aiming to cut Iran's sales to zero, said in
April all sanctions waivers for those importing Iranian oil
would end at the beginning of May.  urn:newsml:reuters.com:*:nL1N22410R
    Iran says this will not happen, although its officials are
bracing for a drop in supplies.  urn:newsml:reuters.com:*:nL5N22E6GJ
    Fuji Oil said Iranian oil accounted for about 20 percent of
the company's supplies in the financial year through March, down
from around 30 percent the previous year.
    The company operates one refinery, the 143,000-bpd Sodegaura
facility near Tokyo.
    Fuji Oil bought 1.5 million barrels of Oman crude, Banoco
Arab Medium from Bahrain, and Upper Zakum, an Abu Dhabi grade,
to load in June in a spot tender held last month, according to
Reuters data.
    
($1 = 109.8100 yen)

 (Reporting by Yuka Obayashi; additional reporting by Florence
Tan in SINGAPORE; writing by Aaron Sheldrick; editing by
Christian Schmollinger)
 ((aaron.sheldrick@thomsonreuters.com; 81-3-6441-1320; Reuters
Messaging: aaron.sheldrick.thomsonreuters.com@reuters.net))