Uh oh: Nippon Oil to pay in yen for Iran crude

[Flabbergasted]

Nippon Oil to pay in yen for Iran crude

TOKYO: Nippon Oil Corporation, Japan's biggest refiner, is set to switch payment for the crude it buys directly from Iran from dollars to yen by October, its chairman Fumiaki Watari said yesterday.

An industry source said earlier that Nippon Oil was the first Japanese customer to accept Iran's formal request last week to switch to yen, in line with Tehran's move over the past year to limit dollar-denominated trade.

After months of informally asking its customers to change their payment currency, a switch that will not affect the dollar-based price of the crude or the volume traded, the National Iranian Oil Company (NIOC) issued a written notice last week to customers in Japan, among the last to make the shift.

"Iranian crude is important to Japan. Nippon Oil has started considering paying in yen," Watari said.

He said it would take time to make the necessary clerical changes.

"It would be around September or October when the arrangements are made,' he added.

Separately, an industry source familiar with discussions said that Nippon Oil had told NIOC it would pay in yen.

Watari did not give a current estimate for how much Iranian crude Nippon Oil consumes, but said last year it had reduced imports from Iran by 15 per cent to 120,000bpd due to growing concerns over the stability of supplies.

That makes up about a 10th of Nippon Oil's capacity.

He said there had not been any pressure from the government to change to yen payments.

Iran has said that most of its customers have already switched to non-dollar customers. Officials said in May that more than 70pc of its oil earnings were in other currencies.

But customers in Japan, which buys over 300,000bpd of Iran's 2.4 million bpd of exports, had not made the change.

Iran is Japan's fourth-largest oil supplier, although buyers including Nippon Oil have curbed imports amid growing international pressure over Tehran's nuclear programme.

http://www.gulf-daily-news.com/Story.asp?Article=188147&Sn=BUSI&IssueID=30121

[Selatius]

1. This could add another depressing factor on the value of the US Dollar, already low as it is

Last I heard, the Euro hit a record high against the Dollar. 1.37 USD = 1 Euro. I dunno what it is now, but it's not pretty.

[RC]

2. Two questions - -

1. This effects the Dollar how?

2. Does this mean that bu$h wants to bomb Japan again?

[burythehatchet]

3. ruh roh