Volume of Iran’s oil exports to Japan became twofold in October as compared with the contracts inked in mid-2016.
Iran seeks to obtain 10% of the share in Japan’s three-million-barrel market in the post-JCPOA era and has begun a neck and neck rivalry with Qatar over the East Asian market.
However, the biggest challenge facing the plan to increase Iran’s crude oil exports to Japanese refineries particularly during the post-sanction period remains that the capacity of the Asian country’s oil refineries has declined over the recent years.
In other words, the country's refining capacity has declined from 5.5 million bpd to 3.5 million barrels, because of which competition among oil producers for gaining the strategic market has intensified recently.
Currently, Iran is in oil sale agreement with major Japanese refiners though a duel between Iran and Qatar is underway over becoming the third largest oil exporter to the East Asian nation.
Executive Director for International Affairs at National Iranian Oil Company (NIOC) Seyed Mohsen Ghamsari had previously reported on Japan’s renewal of all its oil purchase contracts with Iran for a year; “Iran's oil export to the Southeast Asian country is currently 120 to 130 thousand barrels per day.”
Nevertheless, recent reports reveal a twofold increase in volume of Iran’s crude oil exports to Japan in 2016.
OPEC Affairs Department of the Ministry of Petroleum announced in a statement that “Japan’s oil imports in October plunged by two per cent decreasing to 3.55 million barrels per day.”
In the meantime, Saudi Arabia has deployed 1.262 million barrels to Japan to remain the largest exporter of petroleum to Tokyo.
The United Arab Emirates (UAE) follows Saudi Arabia to mark the second largest seller of crude to Japan as they shipped nine thousand more barrels to hit a total of about 688 thousand barrels. Meanwhile, Iran and Qatar account for 7.2% and 7% of Japan's oil market, respectively.
Iran exported 22 thousand more barrels of crude oil to Japan in October to reach a total figure of 214 thousand barrels per day.
Kuwait with 202 thousand barrels and Russia with 115 thousand barrels fell behind Iran to become the fifth and sixth exporters of oil to Japan in the previous months.
It is noteworthy that Russia’s exports to Japan in October 2016 plummeted by 229 thousand barrels as compared to the same time period in the earlier year.