While Japanese imports of crude oil dropped in the month of July, imports of Iranian oil continued despite the European Union’s ban on insurance coverage of cargo from the Middle Eastern country. Japanese buyers stopped their cargo loading in accordance with the restriction, however importers continued their journey even after the sanctions went into effect on July 1st. The country’s imports of Iranian oil were down by 52% from the same time the year before, and dropped by 23% from the month of June.
A government source comments that the ships must have already arrived, but the actual unloading of cargo was delayed while waiting for customs clearance. South Korea is also said to have unexpectedly received imports after the July 1st deadline. The source comments that no importer in their right mind would still be at sea in July without insurance, so the only logical explanation is that it was June shipments that weren’t counted until July.
It would have been a breach of the International Convention on Civil Liability for Oil Pollution Damage to have ships carrying Iranian oil without the required insurance. Both Japan and Iran have signed agreements to that clause. One oil-trader in Tokyo says that the cargo in question could even have been in Japan by the first week of June, as it’s been known to take up to three months to clear customs. This revelation comes from data from the oil industry itself, but the Ministry of Economy, Trade, and Industry is expected to release its own data later this week, more than likely showing little to no imports from Iran in the month of July.
Comments Off on JDP Startup Corner: Pros & Cons of Working with a Partner in Japan