For Israel: "Global Economic Confusion"

"... opinions within the Japanese government regarding the latest U.S. sanction are divided.

In the past, Japan gradually reduced the percentage of crude oil imports in accordance with the U.S. government's hard-line stance against iran. Japan also withdrew from a project to develop an Azadegan oil field in southwestern Iran in autumn 2010, even though the project was seen as a symbol of "Hinomaru oil wells"--Japanese-developed oil fields overseas.

Should Japan further reduce crude oil imports from Iran, one of the world's largest oil producers, it may become difficult to reestablish ties in the future.

If Japan increases imports from another oil-producing country, it also runs the risk that country may try to take advantage of the situation and demand higher prices.

However, the Japanese government had no choice other than to take concerted steps with Washington.

The European Union's 27 member nations basically agreed to ban crude oil imports from Iran. South Korea is also expected to follow suit.

"As Europe and many other countries have shown they will cooperate with the United States, we don't want to isolate Japan [in the international community]," a senior Japanese government official said.

But Japan will surely have to increase crude oil imports given that many of its nuclear power reactors are now idle.

One estimate shows that the crude oil used for thermal power plants in fiscal 2012 will be triple the amount in fiscal 2010.

A government source said the U.S. government had sent a behind-the-scenes signal that Washington "would not demand a total ban on imports" from iran. Ahead of the finance ministers' meeting Thursday, the two sides agreed to make a compromise to reduce crude oil imports in an "organized manner."

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Observers warned that a shutout of Iranian crude oil may result in global economic confusion. ..."