Japan’s lower house has passed a bill that would provide insurance for tanker ships carrying Iranian oil, sidestepping EU sanctions, which take effect on July 1, aimed at putting pressure on Tehran to cut its nuclear programme, according to Reuters.
Japan will have access to Iranian oil even after EU insurance bans if the bill passes the upper house, which already showed support. The government will provide up to $7.6 billion coverage for tankers carrying Iranian crude to Japan, Asahi Shimbun reports.
Japan is one of the major Asian buyers who found a way to curb the potential impact of drastic reductions in oil imports due to the sanctions. Japan was initially waived from US financial sanctions after “significantly” reducing oil imports from its 9% purchases of Iranian crude oil. Further reductions could hurt the third-largest economy amidst power shortages in the country.
India and China, are also exempted from US sanctions but are still looking for ways to avoid EU sanctions. South Korea will reduce imports to zero, according to industry sources.
The International Energy Agency reported that Iran’s crude exports fell by 1 million barrels per day to 1.5 million bpd. The US and EU sanctions aim to cut Tehran’s oil revenues.