AlwaysFree: Japan Secretly Proposed Swap Between Iranian Oil And U.S Grain

The administration of Japanese Prime Minister Shinzo Abe, has reportedly proposed the barter of Iranian crude oil with U.S grain via Japan last year, in order to release some tensions between the U.S and Iran. The formal proposal was made in June 2019 when Abe visited Iran, the first visit in 41 years by Japanese prime minister, with an aim to present as a mediator between the two countries. In the June 12 meeting with President Hassan Rouhani, Abe officially proposed the several billion dollars worth of barter deal, and was initially gaining positive sentiments from the two countries. 

The plan visualized the avoidance of U.S sanctions on Iran by bartering U.S soybeans and corn procured by Japan with Iranian crude, and transporting the cargoes after securing the U.S approval. Japan saw that the U.S sanctions could be avoided as the barter or non-monetary transactions would prevent Iran from investing the profits obtained from oil in its military. 

Unfortunately, the diplomatic move by Japan mainly aiming to persuade Iran to agree to have a dialogue with the U.S was unsuccessful as Japan could not overturn Iranian persistence in calling for lifted sanctions before there can be such dialogue. According to sources, the Japanese mediation effort was also affected by the inconsistent policy of the current U.S administration led by Donald Trump, deepening the mistrust Iran had for the United States.

The proposal was made when the U.S was in a heated trade war with China and seeking buyers for its crops, especially soybeans and corn, while Iran needed to export their oil due to the sanctions as well as searching for supply for its declining grain stocks. Abe’s proposal was headed by the secret talks between Tehran and Tokyo earlier in that month in which Iran asked to add machinery and medication to its package. 

Although Iran was interested in resuming its crude oil exports, the doubt that Japanese proposal would be accepted by the U.S arose, and Tehran insisted on the U.S commitment. The Japanese side was initially confident on the persuasion process in overturning the United States stances, but gradually became less so. 

On May 2019, the Trump administration imposed an Iranian crude oil embargo that caused Iran to lose one of its main source of income then responded in anger with a vow that no country will be allowed to export oil via the Straits of Hormuz that separates Persian Gulf from Gulf of Oman if Iran cannot freely export its oil. The thread followed a series of mysterious incidents of oil tankers attacks, which Tehran was widely blamed for. 

In December 2019 when Rouhani visited Japan, the proposal was also discussed on a meeting with Abe and at that time Rouhani learned that the Japanese were unsuccessful in bridging the gaps between Iran and the U.S. Although the Japanese proposal failed, a government source said the friendly country's proposal was seriously considered as the Japanese proposal was better studied and formulated than the French’s, which has also tried to mediate in September 2019 with a plan to provide $ 15 billion credit to Iran. As for late 2019, there was also moves in encouraging Iran to consider both of the proposals in increasing the chances of a deal, but failed because the U.S was noncooperative even after Washington's initial green light.

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