Some Japan trading houses eye resuming Iran oil imports -sources

Kanematsu

19/10/2016 07:49

By Osamu Tsukimori 
    TOKYO, Oct 19 (Reuters) - Japanese traders including 
Marubeni Corp  8002.T  and Sumitomo Corp  8053.T  that stopped 
buying Iranian oil during western sanctions are looking to 
resume imports, potentially by year-end, industry sources said. 
    Conservative Japanese firms have so far held off taking 
Iranian crude due to a lack of internationally acceptable 
insurance coverage, but are looking at ways of using cover 
provided by the Japanese government, the sources said. 
    The traders seeking to restart purchases together imported 
around 50,000 barrels per day (bpd) of Iranian oil before 
sanctions were imposed and renewed purchases would give a boost 
to Tehran's aim of increasing its exports to 4 million bpd. 
    Other Asian buyers have stepped up purchases of Iranian oil 
since sanctions were lifted in January, with Iranian imports to 
Asia, excluding Japan, jumping to 1.60 million bpd in August, up 
92 percent on a year ago. 
    Buyers have taken advantage of a scheme put together by ship 
owners to plug a shortfall in insurance cover due to ongoing 
restrictions on U.S.-domiciled reinsurers, but Japanese firms 
have been reluctant to take part.  urn:newsml:reuters.com:*:nL3N16U3KJ 
    Trading houses have been waiting for private shipping 
insurance to return to full coverage, which could come as early 
as this year. But some traders now hope to piggyback on a 
Japanese government scheme that has been providing ongoing cover 
for so-called "essential" imports of Iranian oil throughout the 
sanctions. 
    The government-cover enabled refiners and trading houses 
such as Mitsubishi Corp  8058.T  and Toyota Tsusho  8015.T  to 
import Iranian oil even after the sanctions were imposed in 
2012.  
    "One solution would be to co-load oil with other buyers," 
said a source with a trading house. Oil loaded on vessels 
already covered by the government scheme would also be fully 
insured, they said. 
    Earlier this month, Mitsui & Co  8031.T  resumed taking 
Iranian oil for the first time since at least 2012, co-loading 
Iranian condensate with a major Japanese refiner on a tanker, a 
source familiar with the shipping schedule said. Mitsui declined 
to comment. 
    Marubeni, which bought Iranian crude, condensate, naphtha 
and fuel oil until 2012, confirmed it had been working to 
restart purchases. A company source told Reuters it hoped to 
resume imports by the end of the year. 
    Sumitomo, which bought liquefied petroleum gas (LPG) from 
Iran before the sanctions, was also looking to buy Iranian oil 
and LPG as long as prices were competitive, an industry source 
close to the matter said. The company declined to comment. 
    Itochu Corp  8001.T  said it was considering resuming 
imports of Iranian oil, while trading house Kanematsu Corp 
 8020.T  which last bought Iran crude in 2010, is also looking 
to resume purchases at an early date, but has not yet lined up 
any customers, a company source told Reuters.  
 
 (Reporting by Osamu Tsukimori; Editing by Aaron Sheldrick and 
Richard Pullin) 
 ((osamu.tsukimori@thomsonreuters.com, +813 6441 1857, Reuters 
Messaging: osamu.tsukimori.thomsonreuters.com@reuters.net;)) 
 
Keywords: IRAN OIL/JAPAN