(Japan to reduce Iran oil imports, supporting US(Kantipur Daily)

By जीवन ताम्राकार on January 12th, 2012

TOKYO , JAN 12 - Japan gave a boost Thursday to the U.S. campaign to sanction Iran over its nuclear program, pledging to buy less Iranian oil, a day after China reacted coolly to the U.S. effort.Iran’s “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 U.S. Treasury Secretary Timothy Geithner, who was visiting Tokyo after two days in Beijing.Japan imports about 10 percent of its oil from Iran, Azumi said.”We plan to start reducing this 10 percent share at soon as possible in a planned manner,” he said.Japan’s quick agreement contrasts with China’s public silence on the matter during Geithner’s visit there. A diplomat who briefed reporters about an upcoming Middle East trip by Premier Wen Jiabao repeated earlier government statements rejecting sanctions as a way to resolve the dispute with Iran.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 U.S. 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.China has criticized U.S. sanctions on Iran, approved by President Barack Obama on New Year’s Eve, as improper and ineffective. Beijing supported U.N. sanctions on Iran’s nuclear program but says action should be multilateral.”To place one country’s domestic law above international law and press others to obey is not reasonable,” Foreign Ministry spokesman Liu Weimin told reporters at a regular briefing Wednesday.Experts said Tokyo’s move to reduce imports from Iran would likely have 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 — and accompanying geopolitical tension — could raise global oil prices and undermine the world economy.”We’re more concerned about the risk of the Iran problem becoming bigger and possibly leading to global economic instability through a possible increase in oil prices,” said Hiromichi Shirakawa, chief economist for Japan at Credit Suisse in Tokyo.The timing is also bad for Japan as the country is already facing an energy crunch. Most of its 54 nuclear power plants are offline because of routine inspections, mechanical problems or stress tests in the wake of last March’s nuclear crisis at the Fukushima Dai-ichi nuclear power plant.Azumi said working out a plan for non-oil imports would take more time. Japan also imports natural gas from Iran.China, the world’s biggest energy consumer, depends on Iran for 11 percent of its oil imports. China bought about 600,000 barrels of Iranian crude per day in November, nearly one-third of Iran’s daily exports of 2.2 million barrels, making Chinese cooperation key to the success of sanctions.”If the Chinese and maybe the Indians are not going to be abiding by U.S. pressure, then I don’t think there will be a major impact on oil prices,” said Koichiro Tanaka, director of the JIME Center at the Institute of Energy Economics Japan in Tokyo.