Business / Corporate

Showa Shell resumes oil imports from Iran after U.S. sanctions waiver

Kyodo

Major crude oil wholesaler Showa Shell Sekiyu K.K. has resumed imports of Iranian oil after Tokyo received a temporary waiver in November from reinstated U.S. sanctions, an industry source said Tuesday.

Japan and seven other economies were granted a 180-day waiver from the oil import ban by the United States. Other Japanese oil wholesalers, including industry leader JXTG Holdings Inc., are expected to follow in resuming oil imports from Iran.

Major Japanese oil distributors had suspended Iranian oil imports since the October contracts. Iranian oil accounted for about 5 percent of Japan’s crude oil imports before purchases were cut.

A Showa Shell ship loaded with Iranian crude has already left the country and is expected to arrive in Japan in early February, according to the source.

But the resumption may be short-lived as the U.S. waiver will expire this spring. Washington has been urging the eight economies to end imports from what it calls the world’s largest state sponsor of terrorism.

The U.S. sanctions are aimed at compelling Tehran to end its nuclear program and support for militant groups in the Middle East. Japanese companies are expected to halt the oil imports from Iran again in February or March in light of the time needed for the settlement of transactions and shipping.

Oil prices have recently fallen amid concerns over a slowdown in the global economy, but U.S. sanctions on Iranian oil could fuel worries over supply shortage and lift prices, analysts said.