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Japan, US near deal on Iran oil import cuts

China Daily | Updated: 2012-02-22 08:20

 Japan, US near deal on Iran oil import cuts

Members of the media wearing protective suits and masks report as they are escorted by Tokyo Electric Power Co employees at TEPCO's tsunami-crippled Fukushima Daiichi nuclear power plant in Okuma, Fukushima prefecture, on Monday. Issei Kato / Agence France-Presse

TOKYO - Japan is close to agreement with Washington on the size of cuts refiners must make in imports of Iranian crude oil to win waivers from US sanctions, two ministers said on Tuesday after a media report the two sides would settle on an 11 percent cut.

The Yomiuri newspaper, citing unidentified sources, said Japan and the United States reached an agreement at talks last week about the size of cuts to crude imports from Iran, with a formal deal expected by the end of this month.

Avoiding sanctions is essential to protect the Japanese financial sector's operations abroad, but cutting oil imports could pose a risk to Japan's economy.

Reliance on oil imports has grown since a 2011 earthquake and tsunami triggered the Fukushima radiation crisis, leading to most nuclear reactors at Japanese power plants being shut down.

"We are closely negotiating with the United States and are moving forward toward mutual understanding, but it is not the case that we have reached a conclusion," Trade Minister Yukio Edano told reporters.

In another development, a high-ranking delegation from the International Atomic Energy Agency arrived in Teheran on Monday for talks on the relevant issues of Iran's nuclear program.

Chinese Foreign Ministry spokesman Hong Lei said Beijing welcomes the move and hopes both sides sustain the good atmosphere of dialogue and cooperation. "China believes this will contribute to a comprehensive, lasting and appropriate solution of the nuclear issue," he said on Tuesday.

Washington is pushing ahead with sanctions because it fears Iran might use its nuclear program to develop nuclear weapons. The European Union has imposed its own embargo on oil imports from Iran, to start from July 1. In response, Iran ordered a halt of oil sales to Britain and France on Sunday in a move symbolic of Teheran's anger with the West.

Iran, the biggest producer in OPEC after Saudi Arabia, denies Western suspicions that its nuclear program has military goals, saying it is for purely peaceful purposes.

The United States says it will punish financial institutions that deal with Iran's central bank, the main clearing house for oil revenues, by shutting them out of US markets.

China Daily-Reuters-Xinhua

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