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Japan oil refiner hedges Iran bets
From East Asia Intel, subscription.Even with the UN Security Council tied up in the knots over how to move toward halting Teherans nuclear armaments project, Japanese oil refiners were getting skittish about their heavy dependence on Iranian crude. Nippon Oil, Japans No. 1 refiner, announced it would cut back on Iran crude by 15 percent this year. Oil is a fungible commodity, but this does send a message. Probably the Chicoms will pick up the slack with the M²s. Whatever other considerations in the decision, Fumiaki Watari, Nippons chairman, told the Financial Times: We have started reducing the percentage of Iranian crude and [are] shifting to other grades. Risks related to the country are getting higher. Iran supplies 14 percent of Japans total oil supply, the third-largest supplier after Saudi Arabia and the United Arab Emirates. Nippons decision would mean reducing Irans shipments to Japan by 4 percent. Nippon said it would substitute oil from its major suppliers Kuwait, Russia and Indonesia to make up the shortfall. Some Teheran spokesmen had already threatened to use the oil weapon if the Security Council moved ahead with efforts to halt Irans flouting of the International Atomic Energy Agencys efforts to halt its uranium enrichment program. Teheran says it is for peaceful uses but Washington and its Western allies suspect it is a means of moving to nuclear weapons production. Japanese policymakers have been torn between their traditional opposition to nuclear proliferation and their heavy dependence on imported fossil fuel. Earlier the U.S. and Japan were publicly at odds over Tokyo's proposed investment in a major new Iranian oilfield as the nuclear weapons crisis developed. Washington is said to be trying to counter Irans threat to use its oil as a counter weapon to possible UN sanctions to force an end to its nuclear program. European and Asian oil companies, including Royal Dutch Shell, Frances Total and Japans Inpex, have contracts in Iran. Iran is increasing its shipment as the largest supplier for China, which is also the worlds second-largest consumer. China and Russia, with their veto of any Security Council action, have said they oppose sanctions and could block any U.S. attempt to impose UN economic sanctions on Iran. Iraq UN redux. This sh*t is getting old. But Irans economy, depending on oil and gas for 80 percent of its exports, and importing refined product from Kuwait to keep its own automobiles going, could be highly vulnerable even to limited sanctions, even were they were applied unilaterally by only some of the major oil importers. The U.S. already has sanctions in place, which have partially impacted Irans oil industry. Posted by: Alaska Paul 2006-03-24 |
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