Iran is the fourth-biggest crude supplier to Japan and Iranian crude accounted for 8.8 percent of total Japanese imports in 2011.
Showa Shell Sekiyu KK, the largest buyer of Iranian crude oil in Japan, is negotiating with Iran to reach an agreement on the renewal of its annual crude oil purchase contract.
The company, which runs the fifth biggest refinery in the country and buys about 100,000 barrels of Iranian crude oil per day, has sent a delegation to Tehran to seal a deal with the National Iranian Oil Company (NIOC) over the 2012 contract.
A company insider, speaking on condition of anonymity, said Showa Shell is facing problems, due to financial sanctions imposed on Iran by the US and the EU, to pay Tehran for purchased oil.
The source added that NIOC and Showa Shell have not reached an agreement on 2012 contract yet and, therefore, details “such as volume are still being discussed.”
On February 20, the Japanese company announced that it will continue to import crude from Iran despite the Western sanctions against the Iranian oil sector.
Showa Shell said it will continue to import about 100,000 barrels per day of Iranian crude oil despite mounting pressure from the United States to cut Iran oil imports.
"(Iran) is an important source of crude for Japan as well as our company, and we will wait for the government's guidance on the matter," Showa Shell Sekiyu KK president Jun Arai added.
Meanwhile, an unnamed official at Showa Shell told Reuters that the firm and Shell are separate companies and have signed different contracts with Iran for importing the country’s crude.
Iran is the fourth-biggest crude supplier to Japan and the Iranian crude accounted for 8.8 percent of total Japanese imports in 2011.
The US and the EU charge Iran with pursuing military goals under the cover of its civil nuclear energy program and have imposed several rounds of international and unilateral sanctions against Iran to force the country to give up its nuclear energy program.
Tehran refutes their claims saying that frequent inspections by International Atomic Energy Agency have failed to prove any diversion in Iran's nuclear energy program toward military purposes.