When it came to helping to get Iran to the nuclear negotiating table, few countries sacrificed as much in terms of economic security as Japan. Now, if Tokyo doesn’t get on board with the latest round of US-led sanctions, it faces another economic menace.
In order to pressure Iran into signing the 2015 nuclear deal, Japan severely cut imports and divested itself of potentially lucrative oilfield deals, all in the interest of being a good soldier in America’s crusade against Iran.
But if Tokyo mandarins thought that this loyalty, Japan’s position as a major ally, and its forbearance in rushing into new investments into Iran’s petroleum sector would pay off down the line, they have been badly mistaken.
No concessions from Washington
According to the US State Department, Washington will adopt a position of zero tolerance for Iranian petroleum imports. No concessions are on offer to its Asian allies.
“We view this as one of our top national security prerogatives … and the preposition would be, no, we’re not granting waivers,” a senior State Department official was quoted as saying by Japan Times.
Two years ago, while the Joint Comprehensive Plan of Action (JCPOA) was being negotiated and signed, Japan and South Korea received some exemptions in recognition not only of their alliances with the US, but because both are entirely dependent on oil imports.
Tokyo was hoping to obtain another exemption as Washington tries to rally the world in another effort to curb Iran’s possible interest in nuclear weapons and be nicer to its people.
Ever since US President Donald Trump pulled the US out of the JCPOA in May, Washington has been putting the squeeze on Iran’s economy and demanding that everybody else do so too. This is taking place even though Japan was never a signatory to the joint plan.
This latest Trumpian blow follows hot on the heels of the US refusal to exempt Japan from new and controversial tariffs on steel and aluminum.
Seoul and Tokyo in the same quandary
Yoshihide Suga, Tokyo’s chief cabinet secretary, told reporters that Japan is involved in talks now over the reapplication of US sanctions against Iran, but said he could provide few details.
“We are watching carefully the impact that the US measures would cause,” he said in a daily press briefing. “We would like to negotiate with the countries involved so as not to have a direct adverse impact on Japanese firms.”
The South Korean Energy Ministry is also in a bind. “We’re in the same position as Japan,” said a spokesman for the ministry, as reported by Reuters.
The two countries have until Nov. 4 to arrange different suppliers. In the past, Saudi Arabia and the United Arab Emirates supplied more than half of Japan’s needs. President Trump is pressuring Saudi Arabia to up its production.
Suga said that Japan would probably make its arrangements public in early August. Japan and South Korea will most likely fall in line as Washington could wield a big stick: blocking firms from the countries from obtaining bank credit.
This latest dispute comes at an awkward time for both Japan and South Korea, since they are seriously concerned about unwanted friction among allies at a time when North Korea may be preparing to give up its nuclear and missile programs.
Post-sanctions Iranian oil exports to Japan peaked at around 700,000 barrels per day, down to about 500,000 bpd in 2017, indicating some nervousness on part of importers about Trump’s intentions for the Iran deal, which was negotiated by his predecessor, Barack Obama and signed in 2015.
Azadegan oilfields
It remains to be seen how the new sanctions will impact infrastructure deals in Iran. At one time, the Japanese oil company Inpex owned 70% of the Azadegan oilfields in southwestern Iran, the largest potential pool in the world.
With great reluctance and under extreme pressure, Inpex gradually reduced its share of the project, finally giving up its entire stake in 2010. Tehran initially offered the site development to China, but results were unsatisfactory, and the Chinese were expelled.
In the most recent development, a petroleum consortium made up of Inpex, France’s Total and Petronas of Malaysia responded to a tender request for Azadegan. However, the consortium was still in the exploratory stage when new sanctions were announced.
The new sanctions may also affect South Korean engineering firms with ambitions in Iran. SK Engineering fears the new sanctions may kill its planned $1.6-billion project to upgrade a refinery in Tabriz. Hyundai is worried about a deal to build a plant that produces ingredients for the plastics industry. A company representative could only say that they are paying close attention to developments.
In less trying times, Japan and Iran enjoyed close and friendly relations; Prime Minister Shinzo Abe fully supported the deal that Trump broke. In return, the Iranian leadership has been willing to give Tokyo a break, understanding the country’s need to maintain close agreements with its chief ally, the US.
Almost as soon as Barack Obama’s 2015 Iran deal was concluded, then-foreign minister Fumio Kishida flew to Tehran to sign an agreement allowing further Japanese investment. Abe is pondering a trip to Tehran this month. But exactly when that will take place, and what can possibly be agreed, is up in the air.
The US treated both Japan and South Korea worst than shit yet they are perfectly willing to take what ever punches throw at them. What type of relationship is that? Master and slaves I suppose. Serve them right.
The US foreign policy is disgusting.
Why a sovereign country should listen to the US against its own national interest?
If Japan and SK can not pay a little price to stand with the USA at the difficult time, then why should USA stand in the harm’s way to guarantee Japan and SK security? Anyhow Japan and SK can ask Tokyo Electric Power Company to build more nuclear power plants to replace the oil sanctioned by the USA.
USA is truly the ruler of the world. Do you have the gut not not listen?
What a shame and humiliation for 140 million Japanese….
South Korea and Japan are not allies of USA. They are occupied by American soldiers and are hostages of USA. Unfortunately, they can only do what the hostage-taker tells them to do.
Japan should look after their trade and should divercify. Don’t listen to US instructions.
Two American lapdogs
Trump is probably the worst geo-strategist the world has ever known. He pisses off everyone. China’s soybean tariffs are hitting the midwest farm belt while the Iran sanctions are increasing the cost of fuel on those same farms. Blowing off Japan and the EU while confronting both Russia and China while harming his political base violates every possible rule of successful strategy.
I wonder how the proud Japanese feel about this? Maybe prouder to be so obedient. 🙂
The big bully U.S., largely to satify Israel’s fear of Iran, is already
in way over its head, and we’ll be the ones paying for this folly.
why iran ever wanted to deal with the us. is beyond me.knowing full well that the u.s cia and british mi6 overthrew the duly elected government of mossedec in 1953 and installed the shah as dictator for the benefit of british petroleum and aramco . and the u s. has never stopped interferring in iran.but there is a problem and that is the young iranians dont feel the same way their parents do about the u.s they are western minded and could posibbly cause a regime change if the u.s.cia and mossad are able to gain enough momentum .
Who is next after Japan?
This is all hoo haa. Not the first time the US started this oil sanctioning nonsense, only to come out later and issue waivers to both SK and Japan. And if Trump gets uppity, then Iran will start impounding oil tankers leaving the Persian Gulf………lol……the problem with Trump is that he is a very predictable joker.The US has long lost to Iran. This is just desperation.
japan should just go their own way with foreign policy and forget about the usa. if the usa gets uppity then just say whaddya gonna do – nuke us? f**k off with that.
Unfortunately global issues are not a simple straight line as you ignorantly put it.
The US is taking care of home affair for once. Suck it up.
Japan and South Korea has been forced to participate in the ongoing covert operations for preparing an Iranian coup.
According to US intelligence sources the economic war and covert operations against Iran has been going on for at least 18 months. The US has ambitions to destabilize Iran through economic war and cut as many ties to Iran as possible. The destabi;ization/coup is according to FBI Whistleblower Sibel Edmonds one of two US alternatives.
The US second alternative is to kill three million Iranian’s if the destabilization plan is unsuccessful. (Source: YouTube Newsbud video "Insiders Reveal Secret Deal to Topple Iran Government!", posted yesterday). Ms. Edmonds has a well-established intelligence network in the region and in the US. Remains to be seen if this will be another "Deep State" fiasco.
We see John Bolton, McCain, and Pat Buchanan as paid "lobbyist" by Iranian MEK Mojahedin-e Khalq ( سازمان مجاهدين خلق ايران, )
Not only America almost all Super poer are acting and bull shitting the Developing countries. now they are pressuring Iran as Saudi Arabian Administration is helping USA and Israel by pouring with Bn Bn $ by purchasing Arms and Ammunition.