South Korean President Lee Myung-Bak (L) igreets Japanese Prime Minister Yoshihiko Noda. Both countries have expressed their intentions to disregard US-led sanctions on Iranian oil.
Source: Press TV
Japan has become the latest country to hint at its intention to ignore US-led oil sanctions on Iran, after South Korea's recent dismissal of Washington's bid to boycott the Iranian crude.
"We are not considering banning imports," Japan Times quoted a Japanese Foreign Ministry official as saying on Friday.
On New Year's Eve, US President Barack Obama signed into law fresh economic sanctions against Iran's Central Bank in an apparent bid to punish foreign companies and banks that do business with the Iranian financial institution.
The bill aims to prevent refiners across the world from paying for Iran's oil. The European Union is also considering measures that would forbid its member states from importing the crude.
Iran's Central Bank has accounts at major Japanese banks for oil trade settlements. If US sanctions are implemented, the Japanese government may have to freeze those accounts. It means Japan's oil imports from Iran would "completely stop," a Finance Ministry official said, suggesting this is a situation the government wants to avoid.
Japan's Finance Minister Jun Azumi, who is due to meet with US Treasury Secretary Timothy Geithner during an upcoming Tokyo visit, is now expected to call for the exemption of Japanese banks from US penalties.
On Thursday, Japanese officials also expressed their concern about the possible negative global economic impact of increasing US and European pressure on Iran over its nuclear program.
An official at the Ministry of Economy, Trade and Industry said an embargo on Iranian oil would lead to a sharp rise in crude oil prices, adding that the US must consider the negative impact of such a development on the global economy.
Tokyo's wariness over any escalation of pressure on the Islamic Republic echoes South Korea's earlier announcement that it would purchase around 10 percent of its needed crude from Iran in 2012, exceeding Seoul's oil imports from Iran in 2011.
South Korea, which is the world's fifth largest oil importer, announced plans to buy 200,000 barrels per day (bpd) of Iranian crude this year, a little more than the 190,000 bpd in 2011.
US sanctions, as well as unilateral embargoes imposed on Iran's energy and financial sectors by Britain and Canada came after the International Atomic Energy Agency (IAEA) issued a report on the Iranian nuclear program early in November, accusing Tehran of seeking to weaponize its nuclear technology.
Despite the widely publicized claims by the US, Israel and some of their European allies that Iran's nuclear program may include a military diversion, Iran insists on its civilian nature, arguing that as a signatory to the Nuclear Non-Proliferation Treaty (NPT) and an IAEA member it has the right to develop and acquire nuclear technology for peaceful purposes.