TAIPEI, Taiwan—American attempts to get major Asian importers of Iranian oil to rein in their purchases are faltering as allies South Korea and Japan give US officials a polite brush-off.
Emerging giants India and China may even increase their purchases, further complicating Washington’s efforts to force Iran to curtail its nuclear program.
In 2011, Japan, South Korea, India and China accounted for 60 percent of Iran’s oil sales, and the US initiative—backed up by financial sanctions—is meant to dig away at the $100 billion in oil revenues Tehran earned last year.
Iran will likely suffer some losses when a planned European Union oil embargo kicks in July, and those could be deepened by the discounted prices it may have to offer to Asian buyers in the face of the sanctions. That adds to the pressure on Iran’s budget but seems set to fall short of the bruising blow that Washington hoped to land.
Neither South Korea nor Japan appears willing to cut back their Iranian purchases by very much, and both China and India might actually step up their imports as Iran’s increased isolation as a supplier forces it to lower prices.
“These consumers depend on Iran for a good portion of their oil, particularly India and China,” said Singapore-based oil analyst Victor Shum of consultants Purvin & Gertz. “It’s very difficult for them to switch.”
That’s a concern for Washington, which hopes that its initiative—combined with the EU embargo—will be enough to force Iran into serious negotiations on the nuclear program the West believes is aimed at producing nuclear weapons. Iran says it is for peaceful purposes only.
Complicating matters are persistent Israeli threats to attack Iranian nuclear installations if sanctions efforts fail. While sympathizing with Israeli concerns over the specter of a nuclear-armed enemy, many western leaders fear an Israeli attack would wreak havoc throughout the Middle East and jeopardize the still fragile international economic recovery, as oil prices spike.
Longtime American ally South Korea, which in 2011 bought about 250,000 barrels per day of Iranian oil—10 percent of its total oil imports—has been a big target for the American effort, recently hosting two visits by senior US officials who came to try to persuade it to cut back or Iranian oil purchases.
So far at least, the results have not been not encouraging.
The Foreign Ministry in Seoul says that no decision has yet been made on the US request, apparently out of fear that the country would be hard pressed to find alternative suppliers to fill in the gap left by Iranian crude.
The picture in Japan is similar. On Friday, Prime Minister Yoshihiko Noda said “the trend is we’ll cut oil imports from Iran” amid continuing efforts to secure alternative supplies from other Middle Eastern countries.
However, Japanese authorities also pressed the US to permit them exemptions from President Barack Obama’s February 6 executive order, which imposes sanctions on foreign institutions involved in helping finance Iranian oil sales. That suggests a determination to continue buying Iranian oil to a significant degree.
