Iran 'extremely important for ensuring Japan energy security': Official

Japan is seeking an early exemption from the US on its sanctions against Iran as among the highest priority for the country's energy security as well as local refiners' need for Iranian oil, a top government official told S&P Global Platts Tuesday.

"Our principle is to get the exemption firmly," Ryo Minami, the newly appointed director-general of oil, gas, and mineral resources at the Ministry of Economy, Trade and Industry said in an interview.

Asked if Tokyo seeks to secure the exemption by November 4, "it would be the sooner the better to get it," he said.

"We have a request from the US to suspend oil imports from Iran but we see Iran as an extremely important country for ensuring Japan's energy security," said Minami, who took the helm of METI's natural resources and fuel department on July 13 after having previously been director for the ministry's oil and gas division over December 2012-July 2015.

Minami said stopping all Iranian oil exports could result in the loss of around 2.5 million b/d of global oil supply, which cannot be absorbed and would trigger a "substantial rise" in oil prices that would not benefit anyone.

"As [Japan] considers to continue importing the crude oil, we intend to tell the US this stance, and we aim to secure their understanding," he said.

While noting Japan's reduction in Iranian oil imports in recent years, Minami added that Japan should be exempt from the US sanction.

Minami's comments came after Petroleum Association of Japan President Takashi Tsukioka said Thursday Japanese refiners have urged the government to seek a US waiver on Iran sanctions with hopes of continuing oil imports at current volumes instead of reducing inflows.

"Certainly we have requests from Japanese companies to negotiate with the US [over Iranian oil imports]," Minami said. "For that sense, this issue has elements of [energy security] policy and the impact on Japanese businesses."

SS