Tokyo (Platts)--28Sep2012/805 am EDT/1205 GMT

Japan's 2012 crude imports from Iran are expected to drop by around 30% from 2011, the president of the Petroleum Association of Japan said Friday.

Speaking at a press conference in Tokyo, Yasushi Kimura said Japan's crude imports so far in 2012 had shown a 30% year-on-year fall, and this trend would continue for the remainder of the year.

Japan's Iranian crude import volumes beyond December will be determined by term contracts to be renewed in the coming months, depending on individual negotiations, Kimura said.

Commenting on data released earlier in the day by the Ministry of Economy, Trade and Industry, which showed Japan's Iranian crude imports in August dropped 66.8% year on year to 101,000 b/d, he said it was "merely to do with loading schedules."

In July, Japan did not import any crude from Iran, the first time since February 1981 that Japan did not import Iranian crude, according to METI data. Japan imported 302,000 b/d of crude from Iran in July 2011.

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, according to ministry officials.

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

JAPAN BUYS MORE SAUDI, KUWAITI CRUDE

When asked about the alternatives to Iranian crude oil, Kimura didn't specify the source, but said: "We are using several kinds of Middle East crude oil."

In August, Japan increased its imports of crude from Saudi Arabia, its largest crude supplier, importing 1.09 million b/d, up 6.9% year on year, METI data showed.

Japan's crude imports from Kuwait in August nearly tripled to 351,000 b/d, the data showed, the largest monthly figure from the country this year.

Japan has increased its crude imports from Saudi Arabia and Kuwait in recent months to make up for the reduced imports from Iran because Kuwait blend and Saudi Arab Medium are seen as possible alternatives to Iranian Heavy and other sour grades, according to industry sources.

Suppliers in the Middle East accounted for 84.3% of Japan's total crude imports in August, up from 82.8% a year earlier, marking the first year-on-year increase in the share of Middle East suppliers in nine months.

Meanwhile, Kimura said Japan's domestic oil demand in fiscal 2012-2013 (April-March) is expected to fall 6% year on year, as a result of an aging population and the country's ongoing shift to natural gas from oil.

Japan's oil product sales were 196 million kl (3.37 million b/d) in fiscal 2011-2012.

Meanwhile, Kimura said Dubai crude prices are expected to hover in the range of $100-115/b in the fourth quarter of this year. "Oil is oversupplied, which is a factor for falling prices, but there are some geopolitical factors" that could play a role in rising prices, he said.

--Atsuko Kawasaki, astuko_kawasaki@platts.com
--Takeo Kumagai, takeo_kumagai@platts.com
--Edited by Jonathan Fox, jonathan_fox@platts.com

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