Japanese importers are searching for new ways to pay for Iranian oil imports worth close to $3b a month after a U.S. district court froze bank accounts held by Tehran.
 

Failure to resolve the payments issue could not only threaten Iranian oil imports – which account for 6.2 per cent of Japan’s oil – but could endanger its repayment of nearly $4bn of loans to Japan.

 

A New York court this month ordered Bank of Tokyo-Mitsubishi UFJ to freeze accounts held by the Central Bank of Iran.
 

The Japanese bank, a unit of Mitsubishi UFJ Financial Group, settles about four-fifths of Japanese oil trades with the Iran’s central bank, which clears most of the country’s oil revenues.
 

Bank of Tokyo-Mitsubishi UFJ has submitted an objection to the New York district court. But while it waits for a response, no commercial bank in Japan appears willing to step in to facilitate transactions between the two nations.

Iran is continuing to sell oil to Japan on credit but without a clear payment system. “It is hard to know how long the flow will last,” Japan’s government said.

Japan’s foreign ministry has raised concerns with Washington, fearing that a prolonged disruption could threaten the repayment of loans from Tehran to Tokyo.
 

(Source: FT)