* U.S. due to review Japan's sanctions waiver this weekend
* Japan first among Asia's top four buyers due for renewal
* Reviews for South Korea, India, China due in December
By Risa Maeda and Manash Goswami
SINGAPORE, Sept 14 Japan has made deeper cuts in
crude oil purchases from Iran since it secured an exemption from
U.S. sanctions in March, putting the country in a strong
position to obtain a renewal when the United States reviews the
Japan was the first of Asia's top four buyers of Iranian
crude to receive a waiver from the United States of tough new
sanctions aimed at reducing Iran's oil income and persuading it
to halt a nuclear programme the West suspects is meant to build
weapons. Tehran denies its nuclear work has a military purpose.
The exemptions were granted to buyers of oil from Iran on
condition that they reduced their purchases.
The combination of tight U.S. and European sanctions has
forced Iran to cut its oil output and almost halve exports from
around 2 million barrels per day last year as Asian customers
struggled to pay for the crude and ship it.
Japanese and U.S. officials have already held meetings on
the renewal, with Tokyo presenting trade data to demonstrate it
is reducing Iranian imports, a Japanese government official
said, declining to be identified as he is not authorised to talk
to the media.
"We expect to be informed of their decision in coming days,"
the official said, referring to a decision by the United States
on extending a waiver on Japan. "We are not so much worried
about their response about the extension."
Since it won its first waiver in March, the world's
third-largest oil consumer has cut imports each month by more
than a quarter except for an increase of 6.8 percent in June. It
completely halted shipments in July.
The United States next granted waivers to South Korea and
India on June 11. Their renewals are due in December.
Since Washington issued those exemptions, official data from
Seoul has shown imports fell by a quarter in June and by 42
percent in July and may halt completely in August.
European Union sanctions, banning insurance cover for ships
carrying Iranian oil, spurred that fall. While South Korea's
shipments are expected to recover in September as Seoul asks
Iran to ship the oil, three months of sharp cuts puts the
country in a strong position to secure a renewal come December.
"To get an extension on the waiver, we need to show only the
import record for six months" (since the waiver was granted),
said a South Korean economy ministry source with direct
knowledge of the matter. "We reduced the imports more than we
had promised to the United States."
He declined to specify what the level of the
officially-agreed reduction was.
Because of the EU embargo affecting shipping, India's
imports also fell, sliding 18 percent in June from a year
earlier and 40 percent in July.
India's case to secure an extension is strong because the
overall cuts have been more than was anticipated, an official at
the country's oil ministry said.
China, Iran's largest oil customer and top trading partner,
was the last of the top Asian buyers to secure the waiver on
June 28. Official data subsequently released showed China's
imports surged in June to an 11-month high. But they fell in
July by 30 percent from a year earlier.
Wider politics, not the oil trade alone, will determine
Washington's review of the waiver for China. Beijing has
repeatedly opposed the sanctions, which it views as unilateral
moves made outside the framework of the United Nations.
The decision will also depend on whether the United States
wants to tighten current sanctions on Iran or not by then.
"It really depends on the U.S. policy by then, if they want
to maintain or step up the pressure on Iran," said a Chinese oil
trading official who deals with Iranian oil. "The topic of a
waiver has long gone beyond the commercial level."
In all, Japan, China, South Korea and India - the top four
buyers - have cut imports from Iran by a fifth in the first
seven months of the year compared to a year earlier. The
steepest reduction is by Japan at 39 percent.
The steep cuts in the first half of the year and
expectations of an extension have already prompted Japan, South
Korea and China to plan take the full volumes of Iranian oil to
which they committed under annual term contracts for September.
But imports will average out significantly lower than last