Iran has received its first payment for crude oil from Japan in over a year, under an interim nuclear deal, Reuters are reporting. The payment of around $550 million will bring some relief to the Iranian economy, which has been stunted by western sanctions over the past two years.
Tough international sanctions over the past two years have cut Iran’s oil exports in half. US measures imposed a year ago stopped the remaining importers of Iranian oil from transferring cash to Tehran, starving the OPEC member of its principal source of hard currency and forcing Iran to the negotiating table over its disputed nuclear program.
Tokyo’s role in sending the first funds may be a boon for Japanese firms jostling for position with international rivals to invest in Iran’s oil and gas sector, should a further agreement end Tehran’s international isolation.
It is unclear why Japan was the first of Iran’s oil buyers to pay. China, India and South Korea also buy crude from Iran and all have billions of dollars of cash held in Iranian accounts pending transfer.
The Iranian funds were released earlier this week from an account held by the Bank of Japan, three sources told Reuters speaking on condition of anonymity because of the sensitivity of the issue.
A substantial portion of frozen Iranian funds are held at the Bank of Japan, one of the sources said.
The funds were transferred to an Iranian Central Bank account in Switzerland, a U.S. Treasury spokeswoman said earlier this week.
Under a November 24 agreement with six major powers, Tehran gets limited sanctions relief in exchange for steps to curb its nuclear program.
The interim agreement gives Iran access to $4.2 billion of its oil revenues frozen abroad if it carries out its part of the deal, while parties continue negotiations for a final agreement within a year. The next round of talks starts on February 18.
Some payments under the six-month deal, which officially began on January 20, depend on Iran fulfilling its commitment to dilute half of its 20 percent enriched uranium to no more than 5 percent enriched uranium.
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