Japanese refiners consider first Iranian crude purchases since 2019 as Iran Japan oil talks gain momentum
TEHRAN/TOKYO: Iran has begun negotiations with Japanese companies to resume crude oil exports under a temporary United States sanctions waiver, but potential buyers are demanding longer exemptions and stronger guarantees on shipping security before committing to purchases, according to three Iranian and Western sources.
The sanctions waiver, issued on June 22 as part of a 60-day peace negotiation process between Tehran and Washington, is set to expire on August 21.
According to two Iranian sources familiar with the matter, three Japanese buyers are considering purchasing Iranian crude oil for the first time since 2019. The sources requested anonymity due to the sensitivity of the discussions.
A Western industry source separately confirmed that Japanese and Iranian officials are holding preliminary talks regarding the possible resumption of oil trade.
An official at Japan’s Ministry of Economy, Trade and Industry (METI), which oversees the country’s fuel supply infrastructure, said the ministry was unaware of the negotiations. Japan’s Foreign Ministry and the U.S. Treasury Department did not immediately respond to requests for comment.
Japan Weighs Return to Iranian Oil After Years of Sanctions
Japan, along with South Korea, India, and several European countries, halted imports of Iranian crude after former U.S. President Donald Trump withdrew from the Iran nuclear agreement in 2018 and reimposed strict sanctions on Tehran.
Since then, China has remained Iran’s largest oil customer, continuing to purchase Iranian crude despite sanctions.
Shipping Security Remains a Major Concern
Japanese officials have indicated that any decision to purchase Iranian oil would ultimately rest with private companies.
A separate METI official stated in June that existing shipping schedules and long-term supply contracts make it uncertain whether Japanese refiners would proceed with Iranian purchases. The official also emphasized that the safety of tanker routes would need to be guaranteed before any deal could move forward.
A senior Iranian official said the United States would need to extend the current sanctions waiver because of the shipping time required between Iran and Japan.
The official added that crude oil would be loaded at Kharg Island, Iran’s main oil export terminal, using Japanese-operated tankers.
Iran Reaches Out to Traditional Oil Customers
A senior official from Iran’s Oil Ministry said the National Iranian Oil Company (NIOC) has contacted traditional customers, including Japanese refiners, informing them that Iran hopes they will resume purchases if a lasting peace agreement is reached and sanctions are lifted.
Iran’s Oil Ministry has not commented publicly on the negotiations.
Strait of Hormuz Security Continues to Raise Risks
Despite the ongoing discussions, security concerns in the Strait of Hormuz remain a significant obstacle.
The future security framework for shipping through the strategic waterway remains uncertain until a durable agreement is reached between Tehran and Washington.
Last week, Iranian forces reportedly intercepted a container vessel in the Strait of Hormuz. Iran’s Revolutionary Guards also stated that vessels transiting the waterway must obtain prior approval.
According to estimates by the United Nations shipping agency, around 80 floating mines remain in the central section of the strategic waterway, further increasing risks for commercial shipping.
A senior executive at a major Japanese oil refinery said securing marine insurance would be the biggest challenge for any future imports from Iran.
Chinese Independent Refineries Likely to Remain Key Buyers
Industry analysts believe the current temporary U.S. sanctions waiver is too short to encourage major Asian refiners to place significant orders for Iranian crude.
Instead, experts expect independent Chinese refineries to remain the primary buyers of Iranian oil until a more permanent sanctions relief agreement is reached.
