August 30, 2012 - 12:42 AMT
PanARMENIAN.Net - Japanese crude oil imports from Iran fell sharply in July, but imports continued despite a halt in loadings by Japanese buyers to avoid running foul of a European Union ban on insuring cargoes from the Middle East nation, Reuters reported.
Japanese buyers stopped loading cargoes in early June to avoid vessels sailing the final part of their journeys to Japan uninsured after the EU sanctions targeting Iran's nuclear program kicked in on July 1.
Japan imported from Iran 126,726 barrels per day last month (624,585 kilolitres), down 52.5 percent from the same month a year ago and down 23.1 percent from June, data from the ministry of finance showed.
The imports may have been due to a delay in customs clearance on one or more cargoes that arrived in late June or earlier. South Korea also unexpectedly imported Iranian crude in July, which was put down to shipment delays in June cargoes.
Any ships carrying Iranian oil in July at sea without the required insurance would have been in breach of the International Convention on Civil Liability for Oil Pollution Damage, which Japan and Iran have both ratified.
The cargoes could have arrived earlier since it can take up to three months to clear customs, a Tokyo-based oil trader said.
Importers can seek customs clearance within three months of a cargo's arrival or apply to have the crude categorized as "import for storage" and held for up to two years before being cleared, a spokesman at Tokyo Customs said.
Japan's Ministry of Economy, Trade and Industry is due to release its own data, which could show lower oil imports. The data is more closely watched by the oil industry because it provides a better snapshot of trade flows. Customs-cleared crude imports from Iran fell 35.6 percent in the first seven months of the year to 212,896 bpd, the Ministry of Finance data showed.
The EU ban on insurance of Iranian cargoes has cast trade with Iran into uncertainty not seen in decades but Asia's crude imports from Iran are likely to recover in September to levels before July 1 when the prohibition started.
China, India, Japan and South Korea, the biggest Asian buyers of crude, together take more than half of Iran's crude exports and have worked around the European Union embargo.
Japan started offering sovereign guarantees on shipments last month, the only country to take such a step, while South Korea announced a resumption of Iranian imports from September.
In doing so, Seoul asked Iran to take responsibility for insurance and use its own tankers to deliver cargos, following in the footsteps of China and India.
Tehran offered to provide up to $1 billion of insurance cover to Iranian vessels shipping oil to South Korea.
Japan is loading about 226,000 bpd in August, more than double the amount loaded in July. Oil usually takes around three weeks to travel from Iran to Japan, so these cargoes will be accounted as imports in August or September.