Japanese oil refiners have started oil payments to Iran through the Asian country’s largest lender, the Bank of Tokyo-Mitsubishi UFJ (BTMU) which has resumed transactions with Iranian banks, a report says.
Tokyo lifted sanctions against Iran last month after a landmark nuclear deal with the Islamic Republic went into effect.
BTMU can now process Iranian oil payments for Japanese refiners both in the yen and euros, energy and metals information provider Platts said, citing an unnamed bank official.
According to the agency, BTMU handled most of Japan’s payments for Iranian oil prior to the sanctions in mid-2012. Japanese refiners made their Iran oil payments in yen via an account held by the Bank of Japan, it added.
Last week, an official at the National Iranian Oil Company (NIOC) was quoted as saying that it wanted to settle payments for its new and outstanding oil sales in euros.
‘In our invoices we mention a clause that buyers of our oil will have to pay in euros, considering the exchange rate versus the dollar around the time of delivery,’ the source told Reuters.
NIOC signed a framework agreement last month to sell up 200,000 barrels per day of crude to French oil and gas major Total.
Spanish refiner Cepsa will ship a 1-million barrel cargo of Iranian oil to its refineries, while Litasco, the trading arm of Russia’s Lukoil, also plans buys from Iran.
NIOC said the Central Bank of Iran (CBI) had decided to carry out all foreign trade in euros when the country was still under sanctions.
However, a NIOC official said the company prefers to receive its oil payments and debt repayments in euros.
‘Iran’s first priority is to receive the oil money and debts in the euros,’ Safarali Keramati, deputy NIOC director of international affairs in charge of marketing and crude oil operations, was quoted as saying by the official IRNA news agency.
He said NIOC has considered several currencies for this purpose but any choice would depend on the buyers’ preference too.
Japan’s Cosmo Energy Holdings Co., Chiyoda Corp. and Inpex Corp. are among the companies which have indicated to deepen relations with Iran after the lifting of sanctions.
Cosmo Energy is weighing to increase crude purchases from Iran, while Inpex, Japan’s biggest energy explorer, wants to make investments in Iranian assets.
Japanese industrial plant maker Chiyoda reached a basic agreement to renovate refineries in the southern Iranian port city of Bandar Abbas, NHK reported last week.
Meanwhile, Japan’s largest refiner JX Nippon Oil & Energy has confirmed renewing its annual 2016 term contract with Iran.
Other refiners, Showa Shell and Idemitsu Kosan, will be renewing their term contracts that are due to start in April, Platts said. (Press TV)