Japan to win exemption from Iran sanctions

Japan is likely to win an exemption from US sanctions by reducing its imports of crude oil from Iran by at least 11 percent per year, media reports said on Tuesday. Japan media outlets including the Yomiuri newspaper, citing unnamed sources reported that the two countries reached an agreement at talks last week, with a formal deal expected by the end of this month. The United States, angry over Iran\'s nuclear program, wants Japan, to cut back on Iranian imports. Japan is the third-biggest customer for Iranian oil. It needs to import more oil in the wake of the Fukushima nuclear crisis, and the country\'s refiners have yet to make significant cuts, awaiting the Japanese government\'s instructions. The United States says it will punish financial institutions that deal with Iran\'s central bank, the main clearing house for oil revenues. A country can earn a waiver from the sanctions if it significantly reduces trade with Iran. Japan\'s Iranian crude imports fell 11.7 percent last year to 313,000 barrels per day, accounting for 8.8 percent of total oil imports. Japan\'s Iranian imports have declined by more than half from 683,000 bpd in 2003. The US sanctions, which President Barack Obama signed into law in December, would penalize financial institutions for undertaking transactions with Iran\'s central bank, exposing the US operations of Japanese banks that deal with Iran. \'European Union sanctions on Iranian oil are a psychological warfare ... Imposing economic sanctions is illogical and unfair, and will not stop our nation from obtaining its rights,\' Iranian officials have declared. Due to the world\'s long-term need for energy, It is not possible to impose sanctions on Iran which has huge resources of oil and gas. The European Union banned imports of oil from Iran recently and agreed to freeze the assets of Iran\'s central bank, joining the United States in a new round of measures. The latest sanction by the European Union will be fully enforced by July 1. The sanction on Iran oil is fraught with risks — of rising energy prices and global financial instability. Russia\'s Foreign Ministry said the sanctions are a severe mistake likely to worsen tensions. In addition to Turkey, Greece, Spain and Italy in Europe, Asian customers of IRI’s oil involving China, India, Japan, South Korea plus South Africa have also refused the sanctions or asked to be exempted from it. Washington and its Western allies accuse Iran of trying to develop nuclear weapons under the cover of a civilian nuclear program, while they have never presented any corroborative evidence to substantiate their allegations. Iran denies the charges and insists that its nuclear program is for peaceful purposes only.