The United States, which is trying to thwart Iran's nuclear program, has asked Japan to cancel a planned deal with the Islamic republic to develop its Azadegan oil reserves. Why, the United States, seems to ask, should Japan team up with Iran to develop oil at a time like this?
The White House in particular appears to be strongly opposed to the idea. Is it a reflection of the neocons' view of Iran as part of the "axis of evil"? Along with its "nuclear suspicions," the White House is wary of moves to "support terrorism, stir Iraqi Shiites and obstruct the Middle East peace process."
"It (the Azadegan development project) is an official agreement between then Prime Minister Yoshiro Mori and President Hatami, who gave Japan top priority," said Minister of Economy, Trade and Industry Takeo Hiranuma. Stressing the government's intention not to back out, he added, "Ever since, Japan has been promoting the project, which we intend to honor."
U.S. President George W. Bush and Prime Minister Junichiro Koizumi have worked closely together in the U.S.-led wars on terrorism and against Iraq. Nevertheless, if the impasse over Iranian oil isn't broken, it could sour Japan-U.S. relations. If Bush and Koizumi are not careful, it could even develop into a second Nissho-maru incident. That incident goes back to 1953, when Britain blockaded Iran in retaliation for its nationalization of the concessions of major oil companies. In defiance of pressure from Britain and the oil companies, Idemitsu Kosan Co. continued to import Iranian oil with the oil freighter Nissho-maru. The incident stirred up feelings of nationalism in Japan at a time when the country had just regained its independence.
There should be no linkage of the Iranian nuclear and oil development issues. Furthermore, by engaging with Iran and promoting cooperation, it also helps to support that nation's policy of moderation.
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Meanwhile, moves to develop a proposed Pacific oil pipeline are intensifying between Japan, China and Russia.
Plans call for the building of a pipeline from Angarsk, near Lake Baikal in central Siberia, to Nakhodka in the Russian Far East to export crude oil to Japan_a project that suddenly emerged from a Japan-Russia summit in January. Japan currently depends on the Middle East for 88 percent of its crude oil. The completion of the pipeline would enable Japan to lower that figure by nearly 20 percent. The Pacific pipeline project is an incentive for Russia to play a larger role in the Pacific community, and it also has the potential to serve as the foundation of Japan-Russia peace_a boon for Japanese oil diplomacy.
However, plans to build a pipeline from Angarsk to Daqing in China's Heilongjiang province are interfering with the Pacific pipeline project. In other words, Russia is weighing its options with both Japan and China to encourage competition. In the 1990s, Japan's was ridiculed by Kazakhstan and other oil producers for its "mission diplomacy"_ it seemed all Japan ever did was send missions. While Japan's enthusiasm for digging for oil cooled noticeably, China steadily advanced projects to secure oil in the Middle East, Russia and Central Asia. In 2010, China's oil imports are expected to surpass Japan's. We are about to enter an age in which Japan and China scramble for oil.
With the end of the Iraq war, Japan must also engage in Iraqi oil diplomacy. Iraq is second only to Saudi Arabia in the volume of its oil reserves.
Some U.S. officials are proposing giving Japan preferential rights to receive Iraqi oil as a way to encourage it to give up the Azadegan development project. The United States has unofficially proposed holding bilateral energy talks with Japan, but the true aim may be to swap Iraq for Iran.
But Japan must not give in to such cunning tactics. It should stand by its policy of assisting with the production of oil "of the Iraqi people, for the Iraqi people and by the Iraqi people." Japan should cooperate in the establishment of a distribution system that will serve as the foundation of a long-term, stable supply of oil in Iraq. Allowing itself to be at the mercy of the United States to receive Iraqi oil would only bring scorn upon Japan from the Iraqi people and other Middle East countries.
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The top three exporters of oil to Japan are the United Arab Emirates,Saudi Arabia and Iran in that order. However, since Arabian Oil Co. lost its concession in the Khafji oil field, bilateral relations with Saudi Arabia have become creaky. The failure to extend the concession has caused some officials of the Ministry of Economy, Trade and Industry to hold a grudge against Saudi Arabia. Such anti-Saudi sentiment is partly responsible for Japan's sudden eagerness to develop Azadegan oil reserves. Japan must not be deluded by neocon thinking that attaches importance to Iraq and slights Saudi Arabia, which is still an important oil supplier. Japan must strengthen its Saudi ties.
The war on terror, the upheavals among Islamic oil producers, U.S. oil security strategy, Russia's attempt to become a major oil power and the rise of China. In the 30 years since the oil shock, international oil politics has faced an unprecedented series of wrenching changes. To overcome this crisis, Japan needs to make the most of the power of the market (money) and technology (alternative energy sources). At the same time, it should pursue a magnanimous policy of oil diplomacy.
Can Japan score a hat trick by securing concessions for Iranian, Russian and Iraqi oil? Each carries a great risk. But risks are inherent to oil politics. Japan should recognize once again that oil involves international politics and make a fresh start in oil diplomacy. (2003/07/22)
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