Iran set to cut off Japan oil

Press, 22 April 1980, Page 8

Iran set to cut off Japan oil

NZPA-Reuter Teheran Iran will suspend oil shipments to Japan from today unless Japanese companies agree_ to the new price of SUS3S a barrel and is actively seeking new contracts in Eastern Europe to buy the resulting surplus. The Iranian Oil Minister (Dr Ali Akbar Moinfar), commenting on reports that the Japanese oil companies were refusing to revise letters of credit to take account of the new price, said: “If any one (Japanese) company decides not to pay, we stop supplying to that company, not to Japan as a whole.” In Tokyo, Japanese trading and oil import companies said they would not budge in their refusal of Teheran’s demand for an extra SUS2.SO a barrel from April 1, despite the supply suspension threat. However, a spokesman for one of the firms, Marubeni Trading House, said that the companies had proposed continued price negotiations with the National Iranian Oil Company in Teheran.

The Iranian Oil Minister told a press conference in Teheran that the possible suspension had nothing to do with the prospect that Japan might impose economic sanctions against Iran in support of the United States stand on the Teheran hostage crisis. “We realise that the Japanese are trying to mix the two things together. They’ve refused to pay $35. We believe this is the result of political pressure on these companies,” Dr Moinfar said. He said Iran had recently concluded contracts with a number of unidentified countries, some of them in Eastern Europe, to soak up oil made available by a suspension of supplies to existing buyers. Japan buys about 520,000 barrels a day — or. some 10 per cent of its oil imports — from Iran, making it Iran’s largest,.single customer. The price of Iranian crude was raised by SUS2.SO a barrel retroactive to April 1, bringing it Up; to SUS3S a barrel. The. Japanese buyers say this makes it unacceptably high ; compared with Arabian light crude, which costs ,SUS 26 a barrel. ■ Although Japan in . the past has been afraid of taking any action that would turn off the Iranian dils taps, it now seefhs prepared to take the risks ’ ':-i., -;

.. Government sources said the United States had been asked to guarantee oil supplies to Japan, which has virtually no oil pf ,its own. They said Tokyo had also asked Washington to persuade big international oil companies not to reduce oil supplies to Japan.. . • . Meanwhile, the 1 Japan-Govt emment has told Japanese' firms not to conclude fresh export contracts to Iran, although. joint ventures, such as a $3200M petrochemical complex in southern Iran, were not affected.