Fuji Oil seeks spot crude oil after U.S. sanctions block Iranian supply

TOKYO, May 9 (Reuters) - Japan’s Fuji Oil Co expects to secure alternative crude supplies through term contracts and by tapping the spot market after the U.S. ended waivers on sanctions on Iran, the company’s president said on Thursday.

Fuji Oil President Atsuo Shibota said he does not see any problems in securing oil supplies from sources other than Iran but he expects they may raise costs by as much as 100 million yen ($911,000) a month for the company.

“We are in a situation where we can buy crude from the free market, so we don’t expect supply disruption even without Iranian oil,” Shibota said, declining to say what suppliers they would tap.

He was speaking at an earnings press conference in Tokyo. Takahiko Yamamoto, a director at Fuji Oil, told Reuters after the press conference that the refiner had already secured most of its supplies for June, mainly through buying on the spot market.

The United States reimposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and six world powers last year. Those sanctions have already more than halved Iranian oil exports to 1 million barrels per day (bpd) or less.

Washington, aiming to cut Iran’s sales to zero, said in April all sanctions waivers for those importing Iranian oil would end at the beginning of May.

Iran says this will not happen, although its officials are bracing for a drop in supplies.

Fuji Oil said Iranian oil accounted for about 20 percent of the company’s supplies in the financial year through March, down from around 30 percent the previous year.

The company operates one refinery, the 143,000-bpd Sodegaura facility near Tokyo.

Fuji Oil bought 1.5 million barrels of Oman crude, Banoco Arab Medium from Bahrain, and Upper Zakum, an Abu Dhabi grade, to load in June in a spot tender held last month, according to Reuters data.

$1 = 109.8100 yen Reporting by Yuka Obayashi; additional reporting by Florence Tan in SINGAPORE; writing by Aaron Sheldrick; editing by Christian Schmollinger