Korea hikes Iran crude imports 20 pct in 2011
South Korea imported 20 percent more crude from Iran in 2011 than in the previous year, an increase that outpaced the overall six percent growth in shipments to the world's fifth-largest oil importer in 2011, Reuters reported.
Under new U.S. sanctions imposed on Iran, Seoul will need to reduce its imports in the next few months to convince Washington it is playing a role in attempts by Western nations to halt Tehran's nuclear programme.
Crude imports from Iran stood at 238,860 bpd in 2011 versus 198,918 bpd in 2010, the state-run Korea National Oil Corp (KNOC) said on Wednesday.
South Korea imported 2.54 million barrels per day (bpd) of crude oil last year, compared with 2.39 million bpd a year ago, the KNOC data showed.
Saudi Arabia, the world's top oil exporter, said earlier this month that it can pump more oil at a moment's notice, after Iran warned Gulf oil producers not to compensate for any disruption to Iranian output.
Saudi Arabia is the only oil producer with enough spare capacity to compensate for a significant disruption in exports from Iran and so the most likely source of alternative supplies should South Korea reduce Iranian imports.
South Korea imported five percent more crude from Saudi Arabia in 2011 than in 2010. Imports stood at 796,304 bpd in 2010, accounting for more than 30 percent of the country's total imports.
In a recent meeting with U.S. officials, South Korea, Asia's fourth-largest economy, argued it would have difficulty in replacing Iranian crude supplies, which account for nearly 10 percent of its crude imports.
Heavily dependent on imported crude, Seoul has yet to publicly commit to cutting imports from Iran, in contrast to Japan, another big buyer of Iranian crude, which pledged its support for the U.S. measures.
Iran's top crude buyer China also boosted imports in 2011. China's shipments rose 30 percent year-on-year to 27.76 million tonnes, or about 555,200 bpd, Chinese customs data showed, keeping China in the top spot of Iran's global crude clients.
Of South Korea's four crude oil refiners, SK Energy and Hyundai Oilbank import Iranian crude oil. The two refiners struck annual deals to buy a total of 200,000 bpd of Iranian crude this year, a little more than the 190,000 bpd in 2011, but are also keeping an eye out for potential replacements.
Tehran has faced a growing array of U.N. and unilateral sanctions for years, but a U.S. bill that President Barack Obama signed into law on New Year's Eve went further than previous measures, aiming to stop countries paying for Iranian oil.
South Korea has some $5 billion in money owed to Iran's central bank for crude oil imports trapped in its banking system because of the difficulty of sending money to Iran without falling foul of U.S. sanctions.
South Korea sourced 87 percent of its total crude imports last year from the Middle East -- mainly Saudi Arabia, Kuwait, Qatar, the United Arab Emirates and Iran -- up from 82 percent in 2010, according to KNOC data.
Refinery profit margins eased to $4.50 a barrel in December after hitting a year high of $5.67 a barrel in October, and crude runs rose 6 percent last year from a year earlier to 2.53 million bpd helped by firm regional demand.
Oil product exports gained 25.5 percent in December on the year to 37.04 million barrels, and last year saw a 19 percent year-on-year rise to a record high of 407.88 million barrels, according to KNOC data.
Private oil inventories at the end of December stood at 58.76 million barrels, up 6.7 percent from a year earlier.
Edited by: S. Isayev