S. Korea to make sharp cut in Iranian crude imports

PanARMENIAN.Net - South Korea will make sharp cuts in imports of Iranian crude from June as tightening Western sanctions make it impossible to secure insurance cover for tankers to ship the crude, industry and company sources said, Reuters reported.

South Korea is the latest in a growing list of customers that have slashed Iranian crude imports. China, Japan and India, the other key consumers who buy most of Tehran's 2.2 million bpd of exports, have all cut purchases this year as sanctions make it impossible to pay, ship and insure the oil.

South Korea stood out for committing to buy bigger volumes under annual contracts from Iran this year even though the West announced sanctions on Iran. Import-dependent Seoul was banking on talks between Tehran and the West to resolve the dispute.

With no resolution in sight, Hyundai Oilbank, one of two buyers of Iranian oil in South Korea, has decided to stop lifting cargoes from June, industry sources told Reuters. But bigger counterpart SK Energy is sticking with its plan to lift annual committed volumes at least until June.

For July onwards, SK Energy, the country's largest refiner, is in talks with the government to secure insurance cover for tankers shipping the oil.

If the government disagrees, the company will have little option but to halt purchases, said the sources, who declined to be identified as they are not authorized to talk to the media.

"The situation is beyond our control," one of the sources said. "We hope everything can be solved by mutual cooperation between governments."