SKorea to resume Iranian oil imports next month

Associated Press Modified: August 21, 2012 at 5:00 am •  Published: August 21, 2012

SEOUL, South Korea (AP) — South Korea will resume imports of Iranian crude next month within levels that comply with U.S. sanctions, government and industry officials said Tuesday, as the country tries to manage the pain that diminished oil supplies meant for the domestic economy.

The resumption will make South Korea the latest Asian country to bypass the European Union's insurance ban on Iranian oil shipments. In July, the EU ban hit the four key Asian markets for Iranian oil, China, India, Japan and South Korea, which were earlier exempted from U.S. government penalties after they made significant cuts to their Iranian oil imports.

South Korea is in a difficult position in its dealings with Iran, analysts said: Seoul wants to maintain close ties with its most important ally, the United States, as Washington pushes for tighter sanctions meant to derail Iran's suspected nuclear weapons program, but South Korea also needs to keep alive crucial business and energy ties with Iran, whose crude is cheaper than other oil exporters.

Critics say major Asian countries' pursuit of Iranian oil hurts Western efforts to confront Tehran's nuclear ambitions.

South Korean government officials, however, said the oil import resumption will comply with the Obama administration's guidelines.

"The volume of oil South Korea is set to resume importing from Iran is within the range that was promised to the United States," said an official at South Korea's Knowledge Economy Ministry. The official spoke on condition of anonymity because of his involvement in ongoing diplomacy on the issue. The official confirmed that imports of Iranian crude oil will resume next month.

In the first five months of this year, South Korea reduced its Iranian crude imports by 16 percent from a year earlier.

Since the EU ban stopped imports from Iran in July, South Korean refiners have been talking with the Iranian National Oil Co., the National Iranian Tanker Co. and the Iranian government about ways to ship crude on tankers provided and insured by Tehran.

Before the EU sanctions hit, South Korea was the world's fourth-largest buyer of Iranian crude.

SK Energy Co., South Korea's largest oil refiner, which purchased 10 percent of its crude from Iran before the sanctions hit, is discussing dates and details with Iranian firms and the government in Tehran, said spokesman Yoo Jung-min. Hyundai Oil Bank Co., South Korea's No. 4 refiner, also expects to restart oil purchase from Iran next month, company spokesman Koh In-soo said. They are the only South Korean refiners that buy crude from Iran.

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