Iran General NewsS.Korea buys more Iran oil but eyes alternatives

S.Korea buys more Iran oil but eyes alternatives


Reuters: South Korea will buy around 10 percent of its crude from Iran in 2012, up slightly from last year, as the country seeks a waiver from toughened U.S. sanctions that could disrupt Iranian oil shipments.

By Cho Mee-young

SEOUL, Jan 4 (Reuters) – South Korea will buy around 10 percent of its crude from Iran in 2012, up slightly from last year, as the country seeks a waiver from toughened U.S. sanctions that could disrupt Iranian oil shipments.

Refiners in the world’s fifth-largest oil importer have struck annual deals to buy 200,000 barrels per day (bpd) of Iranian crude, a little more than the 190,000 bpd in 2011, but are also keeping an eye out for potential replacements.

U.S. President Barack Obama signed into law on Saturday new sanctions that could prevent refiners from paying for Iran’s oil, while the European Union is considering measures that would ban its member countries from importing the crude.

Tehran has warned it could shut the Strait of Hormuz, a shipping chokepoint through which about 35 percent of the world’s oil is shipped, if sanctions were imposed on its crude exports.

South Korea will meet with U.S. officials this quarter to lobby for an exemption to U.S. sanctions to enable it to continue buying and paying for Iran’s oil, government sources said.

Iran, already struggling to repatriate oil payments under previous sanctions targeting financial transactions, has an estimated $5 billion of oil money stuck in accounts in South Korea.

SK Energy will buy the additional crude, taking 130,000 bpd in 2012, up 10,000 bpd on the year, a government source said.

An SK Energy spokesman declined to comment when asked about the deal.

Hyundai Oilbank, the only other South Korean refiner that buys Iranian crude, will import 70,000 bpd in 2012, unchanged from 2011, a Hyundai spokesman said on Wednesday. Neither traders nor spokespeople could give more information on the terms of the deals.

Hyundai is making contingency plans for any disruption in the flow, the spokesman said.

“We are planning for various scenarios, including diversifying supply lines, if the situation changes,” the spokesman said.

If Iran’s oil flow is disrupted, South Korea’s government could consider a release of oil from strategic stockpiles kept to provide a buffer for refiners during emergencies, government sources said.

Top Iranian crude buyer China has yet to agree 2012 oil deals and has cut its imports from Iran by more than half for January as the two haggle over terms.

China has bought crude from Russia, Vietnam, West Africa and Iraq to substitute for the 285,000 bpd it has cut from January Iran supplies.

South Korean refiners would likely look to the same sellers and to top oil exporter Saudi Arabia to meet any supply disruption.

Saudi Arabia is the only oil producer with enough capacity to compensate for the around 2 million bpd of crude that Iran exports.

SK Energy could replace Iranian oil with imports from elsewhere in the Middle East if it needed to, although that might cost more money, an SK Energy source said.

Latest news

Iran’s Youths Broke the Spell of Fear

One of the main characteristics of the recent protests in Iran is the courage and fearlessness of the people,...

Iran Is on the Brink of a Revolution

The wall of fear has been broken. In many cities across Iran, women are taking to the streets, leading...

Iran’s Regime Claims To Fill Global Energy Gap Despite Crippled Petroleum Sector

In recent weeks, the Iranian regime’s officials have been constantly exaggerating their huge capacity in oil and gas reserves...

What Is Happening in Iran?

Following the brutal killing of Masha Amini, the Iranian people have once again united to fight and defeat the...

Iran Regime’s Ministry of Culture’s Decision To Eliminate Children’s Intellectual Centers

With the so-called ‘Cultural Revolution’ which took place between 1980 and 1983, the Iranian regime tried to purge the...

Water Shortage Crisis and the Destruction of Iran’s Water Resources

Iran is currently suffering from a number of dangerous natural disasters. One of the most worrying is the drying...

Must read

Germany Faces Pressure to Get Tough on Iran

Iran Focus London, 10 Jan - The German government is facing...

Security Council adds sanctions against Iran

New York Times: The Security Council on Monday adopted...

You might also likeRELATED
Recommended to you