South Korean refiner Hyundai Oilbank has loaded a cargo of crude in Iran for delivery later this month while a cargo for refiner SK Energy arrived this week as Seoul resumes imports following 2 month gap.
The north Asian country has restarted Iranian oil imports of about 6 million barrels per month or 200,000 barrels per day of full contracted volumes after a way was found to get around a European Union ban on insurance cover. The cargoes are being transported under Iranian insurance cover to avoid sanctions.
A company source said that Hyundai Oilbank lifted its first Iranian crude last week and it is expected to arrive later this month. Among South Korea's four refiners only SK Energy and Hyundai Oilbank import Iranian crude.
The resumption of imports is unlikely to hinder South Korea's bid to extend a US sanction waiver in December as this year's imports are still down sharply from a year ago.
According to data from state-run Korea National Oil Corporation, South Korea's imports from Iran during the first eight months were 38.77 million barrels or about 159,000 barrels per day down nearly a third from a year ago.
A government source said that the United States wants to see us import no Iranian crude ultimately. A total of KRW 6 trillion to KRW 7 trillion was being held in Iran's won denominated accounts at Industrial Bank of Korea and Woori Bank both owned by the government.
The accounts were to settle payment for Iranian crude but Tehran cannot repatriate them due to Western sanctions though can use them to pay for imports of goods from South Korea.
Tehran offered to provide up to USD 1 billion of insurance cover to Iranian vessels shipping oil to South Korea as Iran seeks to keep its crude flowing to its top four customers South Korea, China, India and Japan.
The four countries which buy more than half of Iran's oil exports, have slashed purchases this year under pressure from EU and US sanctions aimed at squeezing Tehran's oil income to curb its nuclear program suspected of developing weapons.
Source - Reuters
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