Tokyo (Platts)--31Aug2012/743 am EDT/1143 GMT

Japan did not import any crude from Iran in July, preliminary figures released Friday by the Ministry of Economy, Trade and Industry showed.

It is the first time since February 1981 that Japan has had no crude imports from Iran, the METI data shows. Japan imported 302,000 b/d of crude from Iran in July last year.

Japan did not import any Iranian crude in the first two months of 1981 due to the disruption to shipping in the Persian Gulf during the Iran-Iraq war, ministry officials said.

Japan recorded no imports from Iran in July because barrels loaded in late July will not show up in Japan's import statistics for the month as the Iran-Japan voyage takes around 19 days.

Japanese imports of Iranian crude look set to stabilize at 5 million-6 million barrels/month. The Iranian loadings were also made possible by a new supplementary insurance framework set up by the Japanese government to make up for the loss of key protection and indemnity cover as a result of European Union sanctions that came into force on July 1.

Japanese buyers of Iranian oil will likely load about 5 million barrels, or around 170,000 b/d, in September, sources close to the situation told Platts August 21.

This is slightly down on the volumes being loaded this month of some 5.6 million barrels, or 180,000 b/d. Three VLCCs have already loaded at Iran's Kharg Island terminal and another loaded in late August, according to sources and a check of vessel movements.

In August, Japan is scheduled to receive less than 6 million barrels of Iranian crude on three VLCCs, two of which left Iran in late July, sources said earlier. Iranian crude for Japanese buyers has already been loaded this month on four VLCCs.

But only one is arriving in Japan in August, with the rest to arrive in early September, the check of vessel movements showed.

Japan is to receive Iranian crude on at least four VLCCs in September, up from three VLCCs in August, according to the shipping vessel movements.

Japan's imports of crude from Iran have been falling in recent years and are set to fall further in line with an agreement with the US that will allow Japanese banks continued access to the US financial system in return for a pledge to reduce the country's purchases of Iranian crude.

A new law came into effect on June 27 to compensate Japanese buyers of Iranian oil for the expected loss of P&I cover.

--Takeo Kumagai, takeo_kumagai@platts.com
--Atsuko Kawasaki, atsuko_kawasaki@platts.com
--Edited by Jeremy Lovell, jeremy_lovell@platts.com

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