Japanese oil refiners Cosmo Oil Co and Japan Energy Corp. have started paying Iran for crude oil imports in yen instead of dollars, company spokesmen said Tuesday. Iran has been trying to persuade Asian buyers to make payments in non-US currencies to reduce its US dollar holdings, a move that is seen as a response to the dollar’s recent weakness and to pressure from Washington to limit Iran’s dealings with the US financial system.
The moves by the two companies, as well as a similar step taken in September by Nippon Oil Corp., the Japan’s largest refiner, may trigger other Asian refiners to move away from US dollar payment.
Tokyo-based Cosmo, Japan’s fourth-largest refiner by capacity at 635,000 barrels a day, said it has started paying for all its crude oil purchases from Iran in yen, starting with September loading cargoes.
Iranian crude accounted for 11% of all crude processed by the company in the last fiscal year ended in March, Cosmo spokesman Tatsuya Yano said.
Japan Energy, the country’s sixth-largest refiner by capacity, buys around 400,000 barrels a day of crude, with about 12% of it coming from Iran under term contracts through traders.
“We buy all Iranian crude through traders. One of the traders agreed to pay in yen. Thus, we will be paying in yen for part of our Iranian crude purchase,” Japan Energy spokesman Masanori Takada said.
Nippon Oil said last month it would start payment in yen to Iran for September-loading crude oil. Basically all of the 110,000-120,000 barrels of crude oil a day the company buys from Iran will be paid for in yen, company chairman Fumiaki Watari said.