Success for US as Japan offers Iran oil cut

Dubai Business News —  Japan said Thursday it will cut imports of Iranian oil, but a report said the move was a bid to exempt its banks from US sanctions aimed at squeezing Tehran into giving up its nuclear programme.

The pledge came during a visit by US Treasury Secretary Timothy Geithner, who came to Tokyo after receiving short shrift from Beijing for Washington's campaign to smother Iran's vital oil exports and so head off its atomic drive.

"In the past five years, we have reduced... the amount of oil imported (from Iran)," Finance Minister Jun Azumi said during a joint news conference with Geithner. "We wish to take planned and concrete steps to further reduce this share, which now stands at 10 percent," Azumi said.

Geithner came away empty handed from Beijing after unsuccessfully asking China to add its economic might to the campaign to pressure Iran. Azumi, whose resource-poor country is heavily dependent on Middle East oil and has maintained relations with Iran in the face of pressure to ostracise the country, said the atomic issue needed to be dealt with.

"The nuclear problem is a problem that the world cannot ignore," he said. "In this respect, we fully understand actions taken by the United States." Geithner expressed his appreciation for the gesture.

"We are working very closely with Europe and Japan and allies around the world to substantially increase the amount of pressure we bring on Iran. We are exploring ways to cut off the central bank from the international financial system, and to reduce the earnings Iran derives from its oil exports."

He said Washington was at the early stages of consulting with allies on how best to isolate Iran. "We very much appreciate the support Japan has provided standing with us and the international community in support of this very important strategic objective."

The mass circulation Yomiuri Shimbun reported Thursday that Tokyo's move was an effort to persuade the US to exempt Japanese banks from sanctions for dealing with the Iranian central bank. The paper did not offer any figures on the reduction, but said in exchange for telling oil importers to change suppliers, Tokyo will ask the United States to allow Japanese banks to continue dealing with Iranian authorities.

Under Washington's measures, foreign firms will have to choose between doing business with the Islamic republic or the United States. Japanese megabanks would be badly hurt if they are hit with sanctions. The Japanese government believes it would be difficult to impose a total ban on Iranian oil imports, the Yomiuri said.

Reports from En-Maktoob.News.Yahoo.com.