Japan's Showa Shell yet to agree on Iran oil contract -sources
March 16 |
March 16 (Reuters) - Showa Shell Sekiyu KK, the largest buyer of Iranian crude in Japan, has yet to reach an agreement with Iran over the renewal of its annual term purchase contract as Western sanctions complicate talks, industry sources said on Friday.
A delegation from Showa Shell, which buys about 100,000 barrels of Iranian crude oil per day, failed to seal a deal with National Iranian Oil Co over the 2012 contract during its most recent visit last week.
Tightening U.S. sanctions against Iran over the OPEC producer's nuclear programme is making it more difficult for refiners in Japan, Iran's No.3 crude buyer, to pay Tehran for oil.
"They couldn't reach an agreement on the 2012 contract, so details such as volume are still being discussed," a source said, adding that Showa Shell had not indicated how much crude it planned to lift in April.
Company officials were not immediately available for comment.
U.S. allies Japan and South Korea are in talks with the United States on how much Iranian oil imports should be cut in order to get a waiver from Western sanctions.
"Showa Shell would probably not be able to initiate talks on lowering Japan's purchase volume unless it receives instructions from the government to do so," said a second industry source.
At last week's meeting, Showa Shell proposed the addition of an escape clause in new contracts, allowing buyers to declare force majeure if sanctions block them from lifting or paying for Iranian crude and condensate.
Showa Shell is 35 percent owned by Royal Dutch Shell Plc , and about 15 percent held by Saudi Arabian state oil giant Saudi Aramco.
Saudi Arabia has pledged to boost oil supplies to help control prices and protect the global economy from Iranian crude losses from potential sanctions.
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