Preliminary data released by Japan’s Ministry of Finance show that the country’s crude oil imports from Iran dropped 42% month-on-month to 169,100 barrels per day in April.
The drop comes a month after its Iranian crude imports surged to 292,209 bpd. March’s surge came after the resumption of imports in February due to local refiners boosting purchases to meet term contractual requirements. February imports of Iranian crude were posted at 76,057 bpd, marking the first import of Iranian crude in four months, Oil Price reported.
However, the real story behind the numbers is Japan’s kowtow to US demands that it halts Iranian crude oil shipments due to ongoing US sanctions against Iran’s energy sector.
In April, Japanese refiners suspended oil imports from Iran after President Donald Trump upped the geopolitical ante between Washington and Tehran by not extending sanction waivers past May 2 on Iranian oil imports for eight countries, including Japan.
Japan for its part, with a population of 127 million people, is the world’s third largest economy and third largest crude oil importer.
Japan also remains the world’s largest liquefied natural gas importer, ahead of China, and South Korea. Trump’s move to suspend Iranian oil sanctions waivers caught major oil importers as well as markets off-guard since most expected either a continuation of the waivers to keep more barrels on the global markets to help offset the ongoing OPEC+ supply cut to remove 1.2 million bpd.
The removal of oil import waivers put Japan in a tight spot since it has to maintain its close relationship with the US not only to maintain strong economic ties, but it needs US military cooperation against China as Beijing expands its influence in both the heavily contested South China Sea as well as the East China Sea where the two countries have overlapping territorial claims.