Japan’s JXTG says gets supplies from Saudi, others to replace Iranian oil

Iranian oil accounted for about 4 per cent to 5 per cent of Japan’s total oil supplies before the US sanctions kicked in

Japan’s oil and metals giant JXTG Holdings has secured crude oil supplies from other countries such as Saudi Arabia to replace Iranian oil shipments that have been crimped by US sanctions, its president said on Monday.

“We are not importing Iranian oil from May but there is no major impact,” Tsutomu Sugimori, president of JXTG Holdings, told an earnings news conference, when asked about any impact from tougher application of US sanctions on Iranian oil.

“We have already secured supplies to replace Iranian oil from countries such as Saudi Arabia,” he said.

Still, Japanese refiners will work with the Japanese government to find a way to import oil from Iran again, as having diversified sources is an important issue for the resource-poor country, he said, although he provided no details on how that would work.

Iranian oil accounted for about 4 per cent to 5 per cent of Japan’s total oil supplies before the US sanctions kicked in, he said.

Japanese refiners are taking more oil from other Middle East suppliers after the United States ended all waivers from sanctions on Iran starting from this month.

The United States reimposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and six world powers last year, although it allowed Tehran’s biggest buyers to continuing buying some crude oil via waivers for another six months.

The sanctions have more than halved Iranian oil exports to 1 million barrels per day (bpd) or less. Washington, though, is aiming to cut Iran’s sales to zero, and said in April all sanctions waivers for those importing Iranian oil would end at the beginning of May.

In April, the Wall Street Journal reported that JXTG is exploring the sale of its majority-owned Caserones copper mine, which could gain the company about $1bn.

“There is no truth to the report,” Sugimori said. But he would not exclude the possibility of such a sale in the future.

“If the environment changes, anything is possible,” he said, adding that there may be cases where the company should use its money in other projects.

The Caserones project is 51.5 per cent owned by JX Nippon Mining & Metals, a mining and smelting unit of JXTG, 25.87 per cent by Mitsui Mining and Smelting Co Ltd and 22.63 per cent by Mitsui & Co .

The company said on Monday that the Caserones project turned to profit in operating earnings in the year to March 31, booking a 5.5bn yen ($50m) profit against 13.3bn yen loss from the previous year.

Copper concentrate output at Caserones rose to 107,000 tonnes for the year through March 2019, up from 91,000 tonnes a year earlier.