Japan to reduce Iran oil imports, supporting US

By Malcolm Foster

Associated Press

Published: Thursday, Jan. 12 2012 1:45 a.m. MST

U.S. Treasury Secretary Timothy Geithner, left, speaks as his Japanese counterpart Jun Azumi listens during a joint press conference in Tokyo, Thursday, Jan. 12, 2012.

Koji Sasahara, Associated Press

TOKYO — Japan pledged Thursday to buy less Iranian oil, boosting the U.S. campaign to sanction Iran over its nuclear program even as China and Turkey react coolly to the effort.

Iran's "nuclear development problem can't be ignored by the world, so from that perspective we understand the U.S. actions," Finance Minister Jun Azumi told reporters after meeting with U.S. Treasury Secretary Timothy Geithner, who was visiting Tokyo after two days in Beijing.

Japan imports about 10 percent of its oil from Iran, Azumi said.

"We plan to start reducing this 10 percent share as soon as possible in an orderly manner," he said.

Japan's quick agreement contrasts with China's public silence on the matter during Geithner's visit there. A diplomat who briefed reporters about an upcoming Middle East trip by Premier Wen Jiabao repeated earlier government statements rejecting sanctions as a way to resolve the dispute with Iran.

U.S. ally and Iranian neighbor Turkey also signaled it will not comply with American sanctions and would only enforce existing U.N. sanctions. Turkey imports about 30 percent of its oil from Iran.

The American sanctions will be evaluated, but Turkey "does not feel it is bound by any other sanctions," its Foreign Ministry spokesman Selcuk Unal said Thursday in Ankara.

Geithner's trip to Asia's two largest economies is part of a global lobbying effort to win support for the sanctions aimed at halting what Western governments say is Iran's effort to develop nuclear weapons. The sanctions, targeting the oil industry, would bar financial institutions from the U.S. market if they do business with Iran's central bank.

Iran has threatened to respond to sanctions by shutting the Strait of Hormuz, a transit route for a fifth of the world's oil.

Geithner told reporters in Tokyo that the U.S. was working closely with "countries around the world to substantially increase the amount of pressure we bring on Iran" by cutting off "the central bank from the international financial system and to reduce the earnings Iran derives from its oil exports." He characterized the effort as being "in the early stages."

China has criticized the new sanctions, approved by President Barack Obama on New Year's Eve, as improper and ineffective. Beijing supported U.N. sanctions on Iran's nuclear program but says action should be multilateral.

"To place one country's domestic law above international law and press others to obey is not reasonable," Foreign Ministry spokesman Liu Weimin said Wednesday.

Experts said Tokyo's move to reduce imports from Iran would likely have limited negative impact on Japan's economy as the country would probably be able to increase imports from other major oil producers such as Saudi Arabia and the United Arab Emirates.

But the sanctions — and accompanying geopolitical tension — could raise global oil prices and undermine the world economy.

"We're more concerned about the risk of the Iran problem becoming bigger and possibly leading to global economic instability through a possible increase in oil prices," said Hiromichi Shirakawa, chief economist for Japan at Credit Suisse in Tokyo.

The timing is also bad for Japan as it already faces an energy crunch. Most of its 54 nuclear power plants are offline because of routine inspections, mechanical problems or stress tests after last March's radiation crisis at the Fukushima Dai-ichi plant.

Azumi said working out a plan for non-oil imports would take more time. Japan also imports natural gas from Iran.

The U.S. intends to send a team to Tokyo to consult with Japanese officials on how they will carry out the plans, Geithner told public broadcaster NHK later.

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