Japan is seeking an "early" exemption from the US on sanctions against Iran to facilitate oil shipping arrangements, a Japanese government source has said.

The source declined to comment on the outlook for securing the US sanctions waiver or if Washington had asked Japan to stop its Iranian oil imports.

Petroleum Association of Japan President Takashi Tsukioka said Friday that Japanese importers of Iranian oil would need US sanction waivers by November 4 to continue imports because the US aims to shut down Iranian exports.

"We will have to take certain measures if things move because the US wants to take [Iranian oil] to zero," Tsukioka told a news conference in Tokyo.

Tsukioka said refiners' purchases of Iranian oil imports in August could be "the last" without securing waivers as oil loaded after September would be subject to US sanctions. He added that October-loading barrels would be paid for in November.

"This means it will be difficult for us to gain a clear overview of all these developments in the next month and a half," he added.

Japan's largest refiner JXTG Nippon Oil & Energy said Monday it is aware of reports about the US' request to slash Iranian oil imports to zero but said it had not received any guidance from the Japanese government over the imports.

"We will closely monitor and ascertain the situations," a company spokesman said, declining to comment on its impact on Iranian oil imports and possible alternative supplies.

Iran Oil

Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp. said Monday Japanese importers may have to suspend their Iranian oil imports as US President Donald Trump has said the US is imposing "powerful" economic sanctions back "into full effect."

In the face of increased US pressure for the upcoming sanctions, Nogami said: "There is a possibility that [Japanese importers] may stop imports of Iranian oil."

"I cannot rule out the possibility of seeing [Iranian oil imports] falling to zero even if Japan secures [sanctions] waivers from the US," said Nogami, adding that the timing of the zero imports remains unclear.

He added that Saudi Arabia, Kuwait, the UAE and the US could be among possible alternative supply sources if Japan stops importing Iranian oil.

A senior US delegation briefed their Japanese counterparts on June 19 in Tokyo about Washington's new Iran strategy, and discussed the impact of the intended renewal of sanctions.

Japan imported an average of 165,481 b/d of Iranian oil in fiscal 2017-18 (April-March), down 28% from the previous fiscal year. Iranian imports accounted for 5.2% of Japan's total crude imports of 3.19 million b/d in the fiscal year ended March 31, according to the Ministry of Economy, Trade and Industry data.

Trump said on May 8 the US would withdraw from the Iran nuclear deal and re-impose sanctions that have been frozen since January 2016 as part of the Joint Comprehensive Plan of Action.

(Source: Platts)