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South Korea will resume Iran oil imports from Sep if offered ‘appropriate’ shipping insurance

July 13, 2012 (TSR) -┬áSouth Korean refiners will decide “soon” whether to accept an offer from Tehran to use Iranian tankers to send oil to South Korea, with the first loadings possible as early as September, a source close to the matter told Platts July 11.

South Korea has been the country worst hit by EU sanctions against Iran because of Brussels’ ban on the provision of insurance cover for tankers carrying Iranian crude. Seoul said in late June it would halt all imports because it could no longer guarantee tanker insurance.

However, on June 29 it emerged that Iran has offered to supply crude to South Korea on its own tankers. Government officials at the time said the offer was considered “attractive.”

The source said July 11 there were still “a lot of things that need to be addressed,” including verifying the terms of the insurance cover, before Seoul can make a final decision on whether to resume imports from Iran.

A group of South Korean government and oil industry officials traveled last week to Tehran to discuss its offer to supply oil to Seoul using Iranian tankers.

The group included officials from the Ministry of Knowledge Economy, which is responsible for energy, industry and commerce, and the country’s two importers of Iranian crude, refiners SK Innovation and Hyundai Oilbank.

SK Innovation and Hyundai officials said July 11 they would not comment on the possible resumption of Iranian oil imports until the government makes an official announcement. “We are just waiting for the government’s decision,” an official at one of the Korean companies said.

The official, however, did say that there would be no problems in accepting Iranian tankers at ports.

Officials at the Foreign Ministry and Knowledge Economy Ministry declined to comment July 11 as the government is discussing how to resume oil imports from Iran after its delegation returned from Tehran late last week.

The South Korean government may need more talks with Iran, the ministries officials added.

Iran was South Korea’s sixth-largest supplier of crude in 2011 with 87.18 million barrels (238,000 b/d) or 9.4% of total imports of 926.76 million barrels.

Seoul won a 180-day exemption from US financial sanctions that came into force on June 28 after it pledged to cut oil imports from Iran.

South Korean imports of Iranian crude over the first five months of this year were, at 29.22 million barrels or 192,000 b/d, 15.7% down from the same period of last year, according to data from state-run Korea National Oil Corporation.

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