JX Nippon Renews Iran Crude Contracts

JX Nippon Oil & Energy Corp, one of Japan's biggest lifters of Iranian crude, has renewed its annual term oil purchase volumes from Tehran for 2016, senior company officials said on Tuesday.

JX Nippon Oil, a core unit of JX Holdings (JXHGF), kept its volume "unchanged" in the new term contract starting this month, one of the officials said. Sources have said JX had a contract to buy 53,000 barrels per day (bpd) of Iranian crude in 2015.

JX Holdings Chairman Yasushi Kimura said on the sidelines of an industry gathering the refiner's annual term crude contract with Iran had been renewed, although he could not confirm the volumes.

Asked if JX would increase its Iranian volumes once international sanctions put in place against Tehran over its nuclear programme are lifted sometime this year, Kimura said: "That would depend on the economics."

JX has a long history of dealing with other producers, he said, and it may be difficult to increase purchases from one producer alone amid a background of declining domestic demand.

Iran has asked Japanese buyers to increase term crude volumes to the level before the toughened sanctions were imposed in 2012, industry sources said, but some buyers were resistant to raising term volumes and were considering the possibility of buying spot Iranian barrels instead.

Other Japanese buyers of Iranian crude such as Cosmo Oil Co and Idemitsu Kosan Inc are also likely to keep their term volumes mostly steady under new fiscal-year contracts starting on April 1, industry sources said.

Showa Shell Sekiyu and trading houses Toyota Tsusho and Mitsubishi Corp also buy Iranian oil regularly.

Japan's crude imports from Iran have nearly halved from 2011 levels after tougher Western sanctions were introduced in 2012.

Reporting by Osamu Tsukimori