The president of the Petroleum Association of Japan says his country's refineries will temporarily stop importing Iran’s oil in October and will use alternative sources until it is determined whether they can get a sanction exemption permit from the United States or not.

According to Reuters, on Thursday, September 19th, Takashi Tsukioka said:" It seems to me that all companies have taken the same stance; they have temporarily suspended their operations and are now carefully monitoring the situation."

During the sanctions before the 2015 nuclear agreement, Japanese refineries only reduced the amount of oil purchased from Iran, but now most of them seem prepared to completely suspend their import as the deadline for the second round of sanctions on November 13 approaches.

Iran supplies 5 percent of Japan's crude oil import, and Tsukioka says Japan's refineries and the government are trying to maintain their relationship with Iran. He claimed that the new sanctions might not have a huge impact on their relationships.

Earlier in August, he said there was a possibility of a temporary suspension of oil import since mid-October, and the last shipments will arrive in Japan in the first two weeks of November.

In the past two months, after Donald Trump's administration withdrew from JCPOA and the new US sanctions were imposed, Iran’s oil buyers have been looking for alternative ways to replace their supplier. Countries like Japan and India have already asked the US government for exemption from sanctions, but the negotiations of their authorities with Washington have not had any result.

The US secretary of state, Mike Pompeo said the exemption will only be granted in order to give the countries time to reduce their oil import from Iran to zero.

At the same time, sources in India have said that the government has designated two banks, UCO and IDBI, to pay for Iranian oil purchases with Rupee. According to these sources, these two banks have no interactions with the U.S financial system.

The sources also reported that even at the Chennai Refinery, partly owned by the National Iranian Oil Company, there were discussions about a possible suspension of Iranian oil purchase.

The sources that did not want their names disclosed, informed Reuters that the Chennai refinery is at risk of losing insurance coverage, as United India Insurance Company announced that it would not cover losses resulted from the purchase of Iranian oil after October.

Insurance companies are not affected by sanctions, but in order to reduce their risk, they have eliminated the coverage for damages caused by the U.S sanctions or the use of Iranian oil.

The state-owned petroleum company in India had stopped importing oil from Iran once before due to insurance problems.

With the departure of Chennai, Iran will be left with only two other Indian customers.