Millennium Post

Lift on ban may be Japan's boon

Lift on ban may be Japans boon

Japan seems to be the front-runner in bringing Iran to agree to curb its nuclear weapons ambitions, as this economic giant of Asia could be a major importer of Iranian crude can help in bringing Tehran to the negotiating table. But, will it be so easy for Tokyo to resist repeated pressure from Washington? Notably, following soaring US-Japan relations on this issue, Tokyo eventually cut imports drastically and relinquished its interests in several up-stream projects, such as the huge Azadegan oil field. But, as now the deal is signed and sanctions have been lifted, Tokyo may get back in the game. It would be interesting to see what happens in the next few months, including whether US Congress re-imposes sanctions or declares the agreement invalid. The White House, in particular, wants to force foreign firms out of Iran. But, since Japan was always unwilling to the sanction participant in the sanctions scheme because of its total dependence on the Middle East in petroleum imports, curtailing imports from Iran would affect it badly. Perhaps that is why Japanese PM Shinzo Abe met Iran's President Hassan Rouhani on the sidelines in New York at the United Nations General Assembly meeting.

Though Abe was never so supportive to sanctions, under immense pressure from Washington, Japan slowly curtailed petroleum imports. However, Japan was excluded from a total ban by a special waiver allowing it to import some Iranian crude due to what was defined as special circumstances. But, now Japan appears feeling free to expand its interests in Iran's energy sector as the restraints are off for the time being. Even, Iran is recovering from the impacts of sanctions as the exports have reached to more than 3 million barrels per day. Tehran is also anxious to recover its place as Japan's third supplier after Saudi Arabia and Qatar.
It may be noted that Japan has always been eying to increase its energy security by obtaining rights to petroleum reserves in the Middle East and Central Asia, with its 'Hinomaru' policy and the Azadegan oil field is believed to be Tokyo's top priority. But, when Tehran allowed the China National Petroleum Corporation to take over Japan's stake, it was enough to fox Tokyo. By a strange quirk of fate, the Chinese could not do it properly and they lost the bet – providing Japan to try once again its luck in Azadegan. Though the international bid would be surfacing for this oil field in January next year, Iran appears eager to get more Japanese investment and technological advancement to help repair an economy severely impacted by the sanctions – subsequently making a trade agreement and a line of credit from the Japan Bank for International Cooperation for Tehran. And, this agreement indicates of more Japanese investment in a post-sanctions economy and trading atmosphere.

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