Showa Shell resumes Iran oil imports after US sanctions waiver

Major Japanese crude oil wholesaler Showa Shell Sekiyu K.K. has resumed imports of Iranian oil after Tokyo was granted a temporary waiver from reinstated U.S. sanctions on the Middle Eastern country, an industry source said Tuesday.

In November, Japan and seven other economies were granted by the United States a 180-day waiver from the oil import ban. Other Japanese oil wholesalers including industry leader JXTG Holdings Inc. are expected to follow in resuming oil imports from Iran.

A Showa Shell ship loaded with Iranian crude oil has already left the country and is expected to arrive in Japan in early February, according to the source.

But the resumed oil shipments from Iran may be short-lived as the U.S. waiver will expire in spring and Washington has been urging the eight economies to end imports from what it calls the world's largest state sponsor of terrorism.

The U.S. sanctions are aimed at compelling Tehran to end its nuclear program and support for militant groups in the Middle East. Japanese companies are expected to halt the oil imports from Iran again in February or March in light of the time needed for settlement of transactions and shipping.

Major Japanese oil distributors had suspended Iranian oil imports since the October contracts. Iranian oil accounted for about 5 percent of Japan's crude oil imports before purchases were cut.

Oil prices have recently fallen amid concerns over a slowdown in the global economy, but U.S. sanctions on Iranian oil could fuel worries over supply shortage and lift prices, analysts said.