Japan says no decision yet on Iran oil import cuts

TOKYO (Reuters) - Japan's trade and foreign ministers said on Tuesday they have not yet reached an agreement with Washington on how much Tokyo will cut Iranian crude imports to win waivers from U.S. sanctions designed to starve Iran of oil revenue.

Japan is likely to reduce imports of crude oil from Iran by at least 11 percent per year, the Yomiuri newspaper reported, to earn an exemption from sanctions that could shut Japanese banks out of the United States.

The Yomiuri, citing unidentified sources, said Japan and the United States reached an agreement at talks last week, with a formal deal expected by the end of this month.

An agreement on lowering oil imports is essential to protect the Japanese financial sector's operations abroad, but it poses a risk to Japan's economy as reliance on energy imports has increased since last year's earthquake and tsunami triggered the Fukushima radiation crisis, leading to most of Japan's nuclear reactors being kept out of use.

"We are closely negotiating with the United States and are moving forward towards mutual understanding, but it is not the case that we have reached a conclusion," Trade Minister Yukio Edano told reporters.

The United States is pushing ahead with sanctions because it fears Iran might use its nuclear program to develop nuclear weapons.

The European Union has agreed to cooperate with the United States. In response, Iran ordered a halt of oil sales to Britain and France on Sunday in a move symbolic of Tehran's anger with the West.

Iran, the biggest producer in OPEC after Saudi Arabia, denies Western suspicions that its nuclear program has military goals, saying it is for purely peaceful purposes.

SPECIFIC DISCUSSIONS

The United States says it will punish financial institutions that deal with Iran's central bank, the main clearing house for oil revenues. A country can earn a waiver from the sanctions if it significantly reduces trade with Iran.

"Many countries have approached us to discuss their efforts to reduce purchases of Iranian crude which, by statute, could except them from sanctions," a senior official in U.S. President Barack Obama's administration said.

"We are discussing specific cases with specific countries. It would be premature to discuss any of them at this time."

Japan's Foreign Minister Koichiro Gemba also said no agreement has been reached yet. Japan is offering to continue cutting Iranian oil imports but talks are ongoing, a foreign ministry official said earlier.

Japan is the third-biggest customer for Iranian oil. It needs to import more oil to make up for declining use of nuclear power after the Fukushima disaster last March triggered the worst nuclear crisis since Chernobyl 25 years ago.

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For a graphic on Japan's energy sector, click on: http://link.reuters.com/mej23s

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Public safety fears have prevented the restart of reactors halted for routine checks, and only two of the nation's 54 reactors are still operating. The last of those is due to be shut down by late April.

Japan's imports of Iranian crude fell 11.7 percent last year to 313,000 barrels per day (bpd), accounting for 8.8 percent of total oil imports, and have declined by more than half from 683,000 bpd in 2003.

If Japan cut Iranian oil imports by 11 percent from last year's level, as the Yomiuri reported, that would amount to a reduction of 34,430 bpd.

Cosmo Oil Co has already lowered its Iran crude imports to a little below 30,000 bpd from about 40,000 bpd since January.

Other refiners' imports are seen steady so far this year, but imports are likely to be down further from April, when most annual contracts are renewed. The oil refiners have been awaiting instructions from the Japanese government before launching talks with Iran on annual contracts.

Japan's top refiner, JX Nippon Oil & Energy Corp, a unit of JX Holdings, said it has not received any instruction from the government on Iranian oil, including the reported 11 percent cut, and whether Japan will win waivers. Two other refiners also had heard nothing, industry sources said.

"We are worried because the government is not good at planning ahead," one source at a Japanese buyer of Iranian crude said.

By contrast, China and South Korea, the two other big Asian buyers of crude, increased imports from Iran last year.

(Additional reporting by Kiyoshi Takenaka in TOKYO and Alister Bull in WASHINGTON; Writing by Stanley White; Editing by Michael Watson and Paul Tait)

View the original article here

Japan says no decision yet on Iran oil import cuts

TOKYO (Reuters) - Japan's trade and foreign ministers said on Tuesday they have not yet reached an agreement with Washington on how much Tokyo will cut Iranian crude imports to win waivers from U.S. sanctions designed to starve Iran of oil revenue.

Japan is likely to reduce imports of crude oil from Iran by at least 11 percent per year, the Yomiuri newspaper reported, to earn an exemption from sanctions that could shut Japanese banks out of the United States.

The Yomiuri, citing unidentified sources, said Japan and the United States reached an agreement at talks last week, with a formal deal expected by the end of this month.

An agreement on lowering oil imports is essential to protect the Japanese financial sector's operations abroad, but it poses a risk to Japan's economy as reliance on energy imports has increased since last year's earthquake and tsunami triggered the Fukushima radiation crisis, leading to most of Japan's nuclear reactors being kept out of use.

"We are closely negotiating with the United States and are moving forward towards mutual understanding, but it is not the case that we have reached a conclusion," Trade Minister Yukio Edano told reporters.

The United States is pushing ahead with sanctions because it fears Iran might use its nuclear program to develop nuclear weapons.

The European Union has agreed to cooperate with the United States. In response, Iran ordered a halt of oil sales to Britain and France on Sunday in a move symbolic of Tehran's anger with the West.

Iran, the biggest producer in OPEC after Saudi Arabia, denies Western suspicions that its nuclear program has military goals, saying it is for purely peaceful purposes.

SPECIFIC DISCUSSIONS

The United States says it will punish financial institutions that deal with Iran's central bank, the main clearing house for oil revenues. A country can earn a waiver from the sanctions if it significantly reduces trade with Iran.

"Many countries have approached us to discuss their efforts to reduce purchases of Iranian crude which, by statute, could except them from sanctions," a senior official in U.S. President Barack Obama's administration said.

"We are discussing specific cases with specific countries. It would be premature to discuss any of them at this time."

Japan's Foreign Minister Koichiro Gemba also said no agreement has been reached yet. Japan is offering to continue cutting Iranian oil imports but talks are ongoing, a foreign ministry official said earlier.

Japan is the third-biggest customer for Iranian oil. It needs to import more oil to make up for declining use of nuclear power after the Fukushima disaster last March triggered the worst nuclear crisis since Chernobyl 25 years ago.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For a graphic on Japan's energy sector, click on: http://link.reuters.com/mej23s

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Public safety fears have prevented the restart of reactors halted for routine checks, and only two of the nation's 54 reactors are still operating. The last of those is due to be shut down by late April.

Japan's imports of Iranian crude fell 11.7 percent last year to 313,000 barrels per day (bpd), accounting for 8.8 percent of total oil imports, and have declined by more than half from 683,000 bpd in 2003.

If Japan cut Iranian oil imports by 11 percent from last year's level, as the Yomiuri reported, that would amount to a reduction of 34,430 bpd.

Cosmo Oil Co has already lowered its Iran crude imports to a little below 30,000 bpd from about 40,000 bpd since January.

Other refiners' imports are seen steady so far this year, but imports are likely to be down further from April, when most annual contracts are renewed. The oil refiners have been awaiting instructions from the Japanese government before launching talks with Iran on annual contracts.

Japan's top refiner, JX Nippon Oil & Energy Corp, a unit of JX Holdings, said it has not received any instruction from the government on Iranian oil, including the reported 11 percent cut, and whether Japan will win waivers. Two other refiners also had heard nothing, industry sources said.

"We are worried because the government is not good at planning ahead," one source at a Japanese buyer of Iranian crude said.

By contrast, China and South Korea, the two other big Asian buyers of crude, increased imports from Iran last year.

(Additional reporting by Kiyoshi Takenaka in TOKYO and Alister Bull in WASHINGTON; Writing by Stanley White; Editing by Michael Watson and Paul Tait)

View the original article here

Japan says no decision yet on Iran oil import cuts

TOKYO (Reuters) - Japan's trade and foreign ministers said on Tuesday they have not yet reached an agreement with Washington on how much Tokyo will cut Iranian crude imports to win waivers from U.S. sanctions designed to starve Iran of oil revenue.

Japan is likely to reduce imports of crude oil from Iran by at least 11 percent per year, the Yomiuri newspaper reported, to earn an exemption from sanctions that could shut Japanese banks out of the United States.

The Yomiuri, citing unidentified sources, said Japan and the United States reached an agreement at talks last week, with a formal deal expected by the end of this month.

An agreement on lowering oil imports is essential to protect the Japanese financial sector's operations abroad, but it poses a risk to Japan's economy as reliance on energy imports has increased since last year's earthquake and tsunami triggered the Fukushima radiation crisis, leading to most of Japan's nuclear reactors being kept out of use.

"We are closely negotiating with the United States and are moving forward towards mutual understanding, but it is not the case that we have reached a conclusion," Trade Minister Yukio Edano told reporters.

The United States is pushing ahead with sanctions because it fears Iran might use its nuclear program to develop nuclear weapons.

The European Union has agreed to cooperate with the United States. In response, Iran ordered a halt of oil sales to Britain and France on Sunday in a move symbolic of Tehran's anger with the West.

Iran, the biggest producer in OPEC after Saudi Arabia, denies Western suspicions that its nuclear program has military goals, saying it is for purely peaceful purposes.

SPECIFIC DISCUSSIONS

The United States says it will punish financial institutions that deal with Iran's central bank, the main clearing house for oil revenues. A country can earn a waiver from the sanctions if it significantly reduces trade with Iran.

"Many countries have approached us to discuss their efforts to reduce purchases of Iranian crude which, by statute, could except them from sanctions," a senior official in U.S. President Barack Obama's administration said.

"We are discussing specific cases with specific countries. It would be premature to discuss any of them at this time."

Japan's Foreign Minister Koichiro Gemba also said no agreement has been reached yet. Japan is offering to continue cutting Iranian oil imports but talks are ongoing, a foreign ministry official said earlier.

Japan is the third-biggest customer for Iranian oil. It needs to import more oil to make up for declining use of nuclear power after the Fukushima disaster last March triggered the worst nuclear crisis since Chernobyl 25 years ago.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For a graphic on Japan's energy sector, click on: http://link.reuters.com/mej23s

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Public safety fears have prevented the restart of reactors halted for routine checks, and only two of the nation's 54 reactors are still operating. The last of those is due to be shut down by late April.

Japan's imports of Iranian crude fell 11.7 percent last year to 313,000 barrels per day (bpd), accounting for 8.8 percent of total oil imports, and have declined by more than half from 683,000 bpd in 2003.

If Japan cut Iranian oil imports by 11 percent from last year's level, as the Yomiuri reported, that would amount to a reduction of 34,430 bpd.

Cosmo Oil Co has already lowered its Iran crude imports to a little below 30,000 bpd from about 40,000 bpd since January.

Other refiners' imports are seen steady so far this year, but imports are likely to be down further from April, when most annual contracts are renewed. The oil refiners have been awaiting instructions from the Japanese government before launching talks with Iran on annual contracts.

Japan's top refiner, JX Nippon Oil & Energy Corp, a unit of JX Holdings, said it has not received any instruction from the government on Iranian oil, including the reported 11 percent cut, and whether Japan will win waivers. Two other refiners also had heard nothing, industry sources said.

"We are worried because the government is not good at planning ahead," one source at a Japanese buyer of Iranian crude said.

By contrast, China and South Korea, the two other big Asian buyers of crude, increased imports from Iran last year.

(Additional reporting by Kiyoshi Takenaka in TOKYO and Alister Bull in WASHINGTON; Writing by Stanley White; Editing by Michael Watson and Paul Tait)

View the original article here

Greece awaits bailout decision but issues remain

BRUSSELS (AP) — Eurozone governments hoped to sign off on Monday a long-awaited rescue package for Greece, saving it from a potentially calamitous bankruptcy next month, but several key points of division remained, senior officials said.

Finance ministers meeting in Brussels were still wrangling over how to further reduce Greece's debt load and impose even tighter control over the country's spending, and the meeting was expected to stretch late into the night. Rich countries like Germany and the Netherlands and the International Monetary Fund want to be sure that Athens can eventually survive without aid.

But after months of delays, time for Greece is running out. The country needs to secure the euro130 billion ($170 billion) bailout so it can move ahead with a related euro100 billion ($130 billion) debt relief deal with private investors. That deal needs to be in place quickly if Athens is to avoid a disorderly default on a bond repayment on March 20.

"I am of the opinion that today we have to deliver, because we don't have any more time," Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the meetings of eurozone finance ministers, said as he arrived in Brussels.

An uncontrolled bankruptcy would likely force Greece to leave the 17-country currency union and return to its old currency, the drachma, further shaking its already beaten economy and creating uncertainty across Europe.

Heading into the meeting, ministers were optimistic that a deal could be reached.

"We now have all of the elements to achieve an agreement," said French Finance Minister Francois Baroin. "Greece knows what it has to do, and we'll watch over it continually. We also know what we have to do."

But the finance ministers were also negotiating on several fronts, trying to move Greece's other creditors to increase their commitments. Greek Prime Minister Lucas Papademos rushed to Brussels to back up his finance chief, Evangelos Venizelos, in talks with the IMF, the European Central Bank and representatives of private holders of Greek debt.

The goal is to bring Greece's debt down to around 120 percent of gross domestic product by 2020 — the maximum the IMF sees as sustainable. At the moment, the country's debt load stands at more than 160 percent.

Last week, a new report prepared by the European Commission, the ECB and the IMF concluded that the new bailout, Greek spending cuts, and a planned euro100 billion debt relief from private investors would still leave Greece's debt at almost 129 percent of economic output by the end of the decade.

Ministers were exploring several options to close that gap, but as talks dragged on Monday, no final solution appeared imminent.

A Greek official said Monday morning that there seemed to be agreement on further reducing the interest rate on Greece's first, euro110 billion bailout as well as having national central banks in the eurozone, which also hold some Greek bonds, participate in the debt relief. The official was speaking on condition of anonymity because the talks were confidential.

However, other officials questioned the participation of national central banks, as well as whether the ECB would be willing to transfer profits from its Greek bond holdings back to Athens.

On the sidelines of the finance ministers' meeting, Venizelos headed into a new round of talks with representatives of Greece's private bondholders — mostly banks and investment funds — to explore whether they would be willing to accept further losses.

A current plan foresees private creditors swapping their old Greek bonds for new ones with half the face value, lower interest rates and much longer repayment periods.

But now some countries are pushing for bondholders to also give up on an accrued interest payment of around euro5.5 billion on their old bonds, a demand that could further discourage investors from signing up to the debt swap.

Amid the ever-changing mood over the country's rescue, some frustration was setting in among the Greeks.

"Greece comes into today's Eurogroup meeting having fulfilled all the requirements for the approval of the new program," Venizelos said. "For Greeks, this is a matter of national dignity and a national strategic choice and no other integrated and responsible choice can be opposed to it."

The Greek parliament has faced down violent protests to approve the austerity measures demanded by the eurozone. Its main political leaders have committed in writing to uphold the bailout terms even after general elections in April. And later Monday, the government in Athens is expected to introduce in parliament another two pieces of emergency legislation, including wage and pension cuts.

Despite Athens' efforts, however, some countries have indicated their patience with Greece was growing short.

"We've seen that Greece time and time again fails to satisfy the conditions that the international community makes. ... In the Netherlands, it really is an issue that you have to lend money to a country that for the umpteenth time hasn't held itself to its agreements," said Jan Kees de Jager, the finance minister from the Netherlands, which has been especially hard on Greece. "So it's indeed essential to me, and also the Dutch government, that we have control over the money that we're going to lend."

To that end, Greece is expected to be forced to set up a separate account that would ensure it services its debt. This escrow account would give legal priority to debt and interest payments over paying for government services. That would maintain pressure on Greece to stick to promised austerity and reform measures and spare the eurozone the risk of a destabilizing default.

The escrow account would, however, be an unprecedented intrusion into a sovereign state's fiscal affairs and could ultimately see Greece forced to pay interest on its debt before paying salaries to teachers and doctors.

In addition, Greece's international creditors will station permanent representatives in Athens to monitor the country's progress.

Another issue under discussion is how much the IMF will contribute to the new rescue. The fund has provided one-third of the bailouts for Ireland and Portugal and Greece's first rescue package.

"The indication is that the figure will be rather low," a European Union official said, adding however that a final decision from the fund's board is still outstanding. The official was speaking on condition of anonymity because talks were not yet concluded.

Some worry that more austerity could exacerbate Greece's problems by putting a stranglehold on growth. Prime Ministers from a dozen European countries — including the U.K., Italy and the Netherlands — wrote a letter Monday to EU President Herman Van Rompuy and Commission President Jose Manuel Barroso calling for growth across the bloc.

"The crisis we are facing is also a crisis of growth," the letter said. "It is now time to show leadership and take bold decisions which will deliver results that our people are demanding."

___

Don Melvin in Brussels, Toby Sterling in Amsterdam, and Elena Becatoros and Derek Gatopoulos in Athens, Greece, contributed to this story.

View the original article here

Greece awaits bailout decision but issues remain

BRUSSELS (AP) — Eurozone governments hoped to sign off on Monday a long-awaited rescue package for Greece, saving it from a potentially calamitous bankruptcy next month, but several key points of division remained, senior officials said.

Finance ministers meeting in Brussels were still wrangling over how to further reduce Greece's debt load and impose even tighter control over the country's spending, and the meeting was expected to stretch late into the night. Rich countries like Germany and the Netherlands and the International Monetary Fund want to be sure that Athens can eventually survive without aid.

But after months of delays, time for Greece is running out. The country needs to secure the euro130 billion ($170 billion) bailout so it can move ahead with a related euro100 billion ($130 billion) debt relief deal with private investors. That deal needs to be in place quickly if Athens is to avoid a disorderly default on a bond repayment on March 20.

"I am of the opinion that today we have to deliver, because we don't have any more time," Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the meetings of eurozone finance ministers, said as he arrived in Brussels.

An uncontrolled bankruptcy would likely force Greece to leave the 17-country currency union and return to its old currency, the drachma, further shaking its already beaten economy and creating uncertainty across Europe.

Heading into the meeting, ministers were optimistic that a deal could be reached.

"We now have all of the elements to achieve an agreement," said French Finance Minister Francois Baroin. "Greece knows what it has to do, and we'll watch over it continually. We also know what we have to do."

But the finance ministers were also negotiating on several fronts, trying to move Greece's other creditors to increase their commitments. Greek Prime Minister Lucas Papademos rushed to Brussels to back up his finance chief, Evangelos Venizelos, in talks with the IMF, the European Central Bank and representatives of private holders of Greek debt.

The goal is to bring Greece's debt down to around 120 percent of gross domestic product by 2020 — the maximum the IMF sees as sustainable. At the moment, the country's debt load stands at more than 160 percent.

Last week, a new report prepared by the European Commission, the ECB and the IMF concluded that the new bailout, Greek spending cuts, and a planned euro100 billion debt relief from private investors would still leave Greece's debt at almost 129 percent of economic output by the end of the decade.

Ministers were exploring several options to close that gap, but as talks dragged on Monday, no final solution appeared imminent.

A Greek official said Monday morning that there seemed to be agreement on further reducing the interest rate on Greece's first, euro110 billion bailout as well as having national central banks in the eurozone, which also hold some Greek bonds, participate in the debt relief. The official was speaking on condition of anonymity because the talks were confidential.

However, other officials questioned the participation of national central banks, as well as whether the ECB would be willing to transfer profits from its Greek bond holdings back to Athens.

On the sidelines of the finance ministers' meeting, Venizelos headed into a new round of talks with representatives of Greece's private bondholders — mostly banks and investment funds — to explore whether they would be willing to accept further losses.

A current plan foresees private creditors swapping their old Greek bonds for new ones with half the face value, lower interest rates and much longer repayment periods.

But now some countries are pushing for bondholders to also give up on an accrued interest payment of around euro5.5 billion on their old bonds, a demand that could further discourage investors from signing up to the debt swap.

Amid the ever-changing mood over the country's rescue, some frustration was setting in among the Greeks.

"Greece comes into today's Eurogroup meeting having fulfilled all the requirements for the approval of the new program," Venizelos said. "For Greeks, this is a matter of national dignity and a national strategic choice and no other integrated and responsible choice can be opposed to it."

The Greek parliament has faced down violent protests to approve the austerity measures demanded by the eurozone. Its main political leaders have committed in writing to uphold the bailout terms even after general elections in April. And later Monday, the government in Athens is expected to introduce in parliament another two pieces of emergency legislation, including wage and pension cuts.

Despite Athens' efforts, however, some countries have indicated their patience with Greece was growing short.

"We've seen that Greece time and time again fails to satisfy the conditions that the international community makes. ... In the Netherlands, it really is an issue that you have to lend money to a country that for the umpteenth time hasn't held itself to its agreements," said Jan Kees de Jager, the finance minister from the Netherlands, which has been especially hard on Greece. "So it's indeed essential to me, and also the Dutch government, that we have control over the money that we're going to lend."

To that end, Greece is expected to be forced to set up a separate account that would ensure it services its debt. This escrow account would give legal priority to debt and interest payments over paying for government services. That would maintain pressure on Greece to stick to promised austerity and reform measures and spare the eurozone the risk of a destabilizing default.

The escrow account would, however, be an unprecedented intrusion into a sovereign state's fiscal affairs and could ultimately see Greece forced to pay interest on its debt before paying salaries to teachers and doctors.

In addition, Greece's international creditors will station permanent representatives in Athens to monitor the country's progress.

Another issue under discussion is how much the IMF will contribute to the new rescue. The fund has provided one-third of the bailouts for Ireland and Portugal and Greece's first rescue package.

"The indication is that the figure will be rather low," a European Union official said, adding however that a final decision from the fund's board is still outstanding. The official was speaking on condition of anonymity because talks were not yet concluded.

Some worry that more austerity could exacerbate Greece's problems by putting a stranglehold on growth. Prime Ministers from a dozen European countries — including the U.K., Italy and the Netherlands — wrote a letter Monday to EU President Herman Van Rompuy and Commission President Jose Manuel Barroso calling for growth across the bloc.

"The crisis we are facing is also a crisis of growth," the letter said. "It is now time to show leadership and take bold decisions which will deliver results that our people are demanding."

___

Don Melvin in Brussels, Toby Sterling in Amsterdam, and Elena Becatoros and Derek Gatopoulos in Athens, Greece, contributed to this story.

View the original article here