Saturday 27 May 2017

Japan pledges to buy less Iranian oil in boost to US campaign

JAPAN has pledged to buy less Iranian oil, giving a boost to the US campaign to sanction Tehran over its nuclear programme.

The announcement came a day after China reacted coolly to the US effort.

Iran's "nuclear development problem can't be ignored by the world, so from that perspective we understand the US actions", Finance Minister Jun Azumi told reporters after meeting US Treasury Secretary Timothy Geithner, who was visiting Tokyo following two days in Beijing.

Japan imports about 10% of its oil from Iran, Mr Azumi said, adding: "We plan to start reducing this 10% share as soon as possible in a planned manner."

Japan's quick agreement contrasts with China's public silence on the matter during Mr Geithner's visit. It has rejected sanctions as a way to resolve the dispute with Iran.

Mr Geithner's trip to Asia's two largest economies is part of a global lobbying effort to win support for the sanctions aimed at halting what Western governments say is Iran's effort to develop nuclear weapons.

The sanctions, targeting the oil industry, would bar financial institutions from the US market if they do business with Iran's central bank.

Iran has threatened to respond to sanctions by shutting the Strait of Hormuz, a transit route for a fifth of the world's oil.

Experts said Tokyo's move to reduce imports from Iran would be likely to have a limited negative impact on Japan's economy as the country would probably be able to increase imports from other major oil producers such as Saudi Arabia and the United Arab Emirates. But the sanctions could raise global oil prices and undermine the world economy.

The timing is bad for Japan as it is already facing an energy crunch. Most of its 54 nuclear power plants are offline because of routine inspections, mechanical problems or stress tests after last March's nuclear crisis at the Fukushima Dai-ichi plant.

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