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ECONOMICS > Japan 'circumspect' on Iran oil embargo: minister

TOKYO - Agence France-Presse

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This handout picture, taken by Japanese finance ministry on January 12, 2012 shows US Treasury Secretary Timothy Geithner (L) shaking hands with his Japanese countrerpart Jun Azumi prior to their talks at Azumi's office in Tokyo. AFP photo

This handout picture, taken by Japanese finance ministry on January 12, 2012 shows US Treasury Secretary Timothy Geithner (L) shaking hands with his Japanese countrerpart Jun Azumi prior to their talks at Azumi's office in Tokyo. AFP photo

The Japanese government on Friday appeared to be backtracking on the US drive to strangle Iranian oil exports with the foreign minister contradicting an earlier pledge to join Washington's campaign.

Just 24 hours after Japan's finance minister indicated Tokyo was falling in line with US demands, a senior colleague insisted no decision had been made.

The US is trying to raise pressure on Iran over its nuclear programme, threatening to cut off financial institutions that deal with the country's central bank, so squeezing Tehran's vital oil export business.

China had refused to play ball, but Washington appeared to have scored a diplomatic victory during a visit by Treasury Secretary Timothy Geithner on Thursday when Finance Minister Jun Azumi said Tokyo was planning to cut its imports from Iran.

But on Friday Foreign Minister Koichiro Gemba said the issue was not settled and scepticism was required.

"The United States would like to impose sanctions. We believe it is necessary to be extremely circumspect about this matter," Gemba told a news conference with visiting French Foreign Minister Alain Juppe.

"We must look at this extremely carefully and find an intelligent solution. "We as a government are in the process of examining the issue and coming to a common position." Gemba said over the last five years Japan had reduced its dependence on Iranian crude, which now made up around a tenth of the country's oil imports.

"We are examining whether there is any advantage in a further reduction. But it is important to know what impact any reduction would have on the price of crude.

"One can imagine there would be negative effects (from this scheme) not just on Japan but on the world economy." The seeming volte-face comes after what appeared to be a coup for Washington when Azumi told Geithner that Japan was on board with the US in its bid to economically punish Iran for what it and its Western allies say is a weapons programme.

"In the past five years, we have reduced... the amount of oil imported (from Iran)," Azumi said as he stood next to his US counterpart.

"We wish to take planned and concrete steps to further reduce this share, which now stands at 10 percent." Geithner had come away empty handed from Beijing, which had refused to add its economic might to the campaign to isolate Tehran.

India, which buys about $12-billion-worth of oil from Iran a year, also said it had not told refiners to reduce supplies, while South Korea said it would ask the US to let it not cut imports.

The EU has thrown its hat in with the US and said Wednesday it expected to finalise its sanctions against Tehran by the end of the month.

Iran, which insists its nuclear programme is for exclusively peaceful purposes, has repeatedly said it will not abandon uranium enrichment despite four rounds of UN Security Council sanctions demanding it desist.

Tehran has threatened to block the strategic Strait of Hormuz if more sanctions are imposed.

On Friday, Juppe said the world could not afford to let Iran acquire nuclear weapons and oil sanctions were a sensible way forward.

"France and her European partners believe Iran's nuclear programme... is a serious violation of its international obligations and is a threat to world peace," he told the news conference.

"It would be a grave error to ignore this." Azumi insisted Friday that there was "no confusion" and "no inconsistency" within the government, Kyodo reported.

Under Washington's measures, foreign firms will have to choose between doing business with the Islamic republic or the United States. Japan was reported Thursday to be seeking an exemption for its banks in exchange for a reduction in Iranian oil imports.

The pressure from Washington and the European Union to boycott Iranian crude comes at a time when Japan must make greater use of thermal power plants after a massive earthquake and tsunami sparked a nuclear power crisis last March.

The vast majority of Japan's 54 nuclear reactors are now shut down, amid public distrust of the technology and calls for increased safety.

January/13/2012

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Halis Saithan

1/13/2012 11:31:30 AM

How about all nations against Tehran having their own nuclear powerplant shut down all their nuclear powerplants first, including Israel and then tell Tehran to shut down the project ? That would be more fair I think.
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