Japan will load its first Iranian crude cargo backed by sovereign guarantees since sanctions disrupted coverage in the international reinsurance market.
JX Nippon Oil & Energy Corp. and Idemitsu Kosan Co. will load about 1.7 million barrels of crude on the very large crude carrier Ryuho Maru on about July 20 at Kharg Island, Iran’s biggest oil-export terminal, according to three officials from the refiners and Japan’s trade ministry. The tanker, owned by Iino Kaiun Kaisha Ltd., will be backed by the Japanese state, they said, asking not to be identified because the information is confidential.
Japan’s Iranian crude imports will fall in July because refiners were unsure whether the sovereign insurance would be available when they planned July-loading schedules last month, the officials said. Japan’s parliament passed a bill on June 20 to provide $7.6 billion of guarantees to tanker owners that carry Iranian oil. European Union sanctions, introduced as an attempt to persuade Iran to halt its nuclear program, took effect July 1.
The program gives ship owners sovereign guarantees to replace reinsurance that Japan’s P&I club previously obtained under a claims-sharing agreement with the London-based International Group of P&I Clubs, according to a statement from the transport ministry. The coverage protects against third-party liability and environmental accidents.
Japan’s Iranian crude imports dropped 51 percent from a year earlier to 632,189 kiloliters in May, or 128,253 barrels a day, according to data compiled by the Ministry of Economy, Trade and Industry.
Japan’s refiners are scheduled to boost Iranian crude shipments in August compared with July, according to refinery officials. JX Energy, the country’s biggest refiner, plans to import about 40,000 barrels a day of crude and 1 million barrels of condensate, said the company official.
Cosmo Oil Co. will purchase about 35,000 barrels of oil a day for August loading, according to an official with that refiner who also asked not to be identified because the information isn’t public.