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S.Korea imports Iran oil in July due to shipment delay despite EU ban

Iran Materials 23 August 2012 11:33
South Korea imported Iranian crude oil in July due to shipment delays in June cargoes, despite a ban on shipments from July 1 linked to European Union sanctions that restrict insurance on tankers carrying Iranian oil
S.Korea imports Iran oil in July due to shipment delay despite EU ban

South Korea imported Iranian crude oil in July due to shipment delays in June cargoes, despite a ban on shipments from July 1 linked to European Union sanctions that restrict insurance on tankers carrying Iranian oil, Reuters reported.

Asia's fourth-largest economy imported 4.26 million barrels last month, or 137,400 barrels per day (bpd), 42 percent lower than imports a year earlier, data from the state-run Korea National Oil Corp showed on Thursday.

"The cargoes had been booked for June arrivals, but the shipments were delayed by a few days for some reasons on the side of those who sent the cargoes," an economy ministry source with direct knowledge of the matter said by telephone.

"So the imports were included in July," said the source, who declined to be identified as he was not authorised to speak to media.

South Korea, usually the world's No.4 buyer of Iranian crude, imported 38.77 million barrels, or 182,000 bpd, from Iran in the first seven months of this year, down 21 percent from a year ago, the KNOC data showed.

In June, South Korea became the first major Asian consumer of Iranian crude to announce a halt in imports after the government said shipments would be suspended from July 1 because of the European Union insurance ban.

Economy ministry sources said on Monday that domestic refiners would resume imports of up to 200,000 barrels per day of Iranian crude from September, shifting to Iran the responsibility of insurance, and ending the two-month gap.

Tehran offered to provide up to $1 billion of insurance cover to Iranian vessels shipping oil to South Korea as Iran has a major interest in keeping its crude flowing to South Korea, China, India and Japan - its top four customers.

The four countries, which buy more than half of Iran's oil exports, have slashed Iranian purchases this year under pressure from EU and U.S. sanctions that aim to squeeze Tehran's oil income and curb its nuclear programme.

The West suspects Iran wants to develop weapons. Tehran says its programme is strictly for developing nuclear power.

Of South Korea's four refiners, only SK Energy and Hyundai Oilbank import Iranian crude.

Under term contracts with Iran for this year, SK Energy imports two Very Large Crude Carriers (VLCCs) of crude per month, or 4 million barrles, and Hyundai Oilbank imports one VLCC per month, or 2 million barrels, the economy ministry source noted.

South Korea's total crude oil imports fell 0.1 percent in July to 77.79 million barrels from a year earlier.

To plug the Iranian supply cuts, South Korea has turned to other Middle Eastern producers.

Shipments from Kuwait in the first seven months rose 18 percent to over 405,000 bpd, and those from Qatar rose 19 percent to nearly 275,000 bpd.

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