South Korea sticks to Iran oil imports despite EU insurance ban

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South Korea imported crude from Iran in July despite previously announcing there would be no imports because of EU sanctions restricting insurance on tankers carrying Iranian oil, reports said on Thursday.

Data released by the state-run Korea National Oil Corp showed Asia’s fourth-largest economy imported 137,400 barrels per day (bpd), 42% lower than a year earlier.

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

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

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

Another source at a refining company said that some imported crude oil may have been held before customs clearance, insisting no shipments of Iranian crude were made to South Korea in July.

South Korea, usually the world’s no.4 buyer of Iranian crude, imported 182,000 bpd from Iran in the first seven months of this year, down 21% from a year ago, the KNOC data showed.

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 US 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.

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