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Editorial: Japan should engage in energy procurement negotiations without harming national interests

The U.S. administration under President Donald Trump, which has announced that the U.S. is withdrawing from the Iran nuclear deal and re-imposing economic sanctions on the Middle Eastern nation, called on Japan, other Asian nations, and European countries to halt imports of Iranian crude oil.

 

Japan relies on the Middle East for about 90% of its oil imports, of which Iran accounts for 5.5%. What’s more, Tokyo and Tehran have a long history of friendship.

 

Japan should in cooperation with Europe persuade the U.S. to walk back the suspension of Iranian oil imports by cooperating with Europe.

 

Three years ago, the Obama administration and five world powers — the U.K., Germany, France, Russia, and China — agreed with Iran to limit the Middle East nation’s nuclear development activities, including uranium enrichment. As a result, the U.S. lifted its sanctions on Iran.

 

But Trump, who points out that the nuclear agreement is insufficient, signed an executive order to reinstate sanctions. As part of the sanctions, the U.S. pressed its allies to end all imports of Iranian crude oil by a Nov. 4 deadline.

 

It is only natural that Japan’s Chief Cabinet Secretary Yoshihide Suga said that Japan will discuss the issue with other countries concerned to avoid an adverse impact on Japanese businesses.

 

In principle, crude oil imports are based on long-term contracts. So a sudden alteration of a contract could bring disadvantages. Relentless negotiations while keeping an eye open in all directions is indispensable for avoiding negative effects. Japan should also consider asking the U.S. to extend the November deadline for cutting off Iran crude oil imports.

 

The economic sanctions restored by the U.S. are strict enough to cover third countries doing business with Iran. Some in the Japanese government say, “We have no choice but to halt imports of Iranian crude oil” in consideration of Japan’s relations with the U.S.

 

Also, Japan should not fail to make preparations for securing alternate sources of crude oil while stepping up efforts to avoid halting imports from Iran. Japan needs to rush to hold procurement negotiations with other oil-producing countries. It is also hoped that Japan will contrive various procurement scenarios, such as the expansion of barter trading through third countries.

 

It can be said that the U.S.’s latest request to halt crude oil imports once more brought home to Japan the severity of its energy situation as a resource-importing country surrounded by the sea.

 

The diversification of crude oil and other resource suppliers and of the energy mix is the lifeline for Japan. That makes the swift resumption of the operation of safe nuclear power plants all the more urgent. Without that, Japan will have difficulty improving its skills in negotiating resources procurement.

 

Securing stable power sources, including nuclear, is urgently needed for establishing Japan’s energy security.

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