Some oil-consuming countries may be intimidated by the idea of offending Iran, but that does not appear to apply to Japan. Indeed, deeply concerned by those nuclear ambitions, the Japanese have begun to distance themselves from Iran.
The first sign of this took place last week when Nippon Oil Corp. Pres. Fumiaki Watari said his firm planned to reduce its oil imports from Iran. In 2005, those supplies came to 142,000 b/d, or around 14% of Nippon’s total imports. Watari said Nippon would seek 120,000 b/d from Iran in 2006, preferring to make up the shortfall by purchasing from other countries such as Saudi Arabia and Kuwait. For that matter, Nippon could also increase oil imports from Vietnam, where it is developing oil reserves of its own.
Nuclear worries
Nippon Oil is the first Japanese oil firm to announce a cut in oil imports from Iran, a decision explained by Watari as due to uncertainties stemming from the disagreement between some Western powers and Iran over its nuclear development.
That’s a remarkable stance to take, especially since Japan imports 16% of its oil supply from Iran and also holds 75% of the license to a development project in Azadegan oil field under a 2004 agreement.
But the Japanese also recognize a threat when they see one. In early March, Iran’s Foreign Minister Manouchehr Mottaki said his country was likely to reconsider oil field development projects and other economic interests with the Japanese if they supported US-led efforts against Iran’s nuclear program.
“Friendship facilitates the economic relationship with Japan,” Mottaki said. He even tried to play down the significance of Iran’s nuclear ambitions by saying that his country’s uranium enrichment program was a “small” operation and not commercially developed.
Not biting
The Japanese, who know the full meaning of even small nuclear devices, were not biting-oil interests or no oil interests. Indeed, Mottaki’s threat was merely a face-saving follow-on to remarks by Japan’s Foreign Minister Taro Aso in late February unequivocally rejecting Iran’s nuclear program. In their face-to-face meeting, Aso told Mottaki: “For Iran to persist in domestic uranium enrichment when international trust has not been restored will just complicate efforts to solve the problem.” Aso also called on Iran to give a “wise and positive response” to a Russian proposal, which he described as a potential “breakthrough” to the Iranian nuclear problem. But Mottaki refused to listen. Instead, he insisted his country would not suspend its uranium enrichment program, telling Aso that Iran is engaged only in “research activities” on a laboratory scale and that halting the resumption of uranium enrichment operations is “impossible.” Given Japan’s dependency on foreign oil, the Iranians doubtlessly thought they could buy or blackmail the Japanese into supporting them. Very clearly, they thought wrong, failing to understand that Japan prefers no Iranian oil to Iranian nuclear proliferation.✦