South Korea imported more Iranian oil in April prior to the embargoes imposed by the US and Europe that come effective in June and July respectively.
According to Korea National Oil Corp, a state-run institution, Seoul imported a total of 25.25 million barrels from Iran during the first four months of 2011, representing a 10% decrease from the 28.1 million barrels during the same period a year ago. The increase of imports in April accounted to 7.5 million barrels, a 42% rise from the same period last year.
“The increase in Iran crude oil imports in April might be because they are importing more in advance due to given notice about halting Iran crude oil imports,” Yoo Young-kook, senior analyst at KTB Investment & Securities Co, said. ”
Another scenario is that there might be an expectation that Iran sanctions will be resolved positively so the purchase is increasing.”
SK Energy and Hyundai Oilbank are the two South Korean oil refineries which import Iranian crude. Reports suggest both refineries have annual deals to increase oil imports from Iran in 2012, up from the 190,000 bpd agreed in 2011.
SK Energy says it will stop importing Iranian oil in July when the European Union’s sanctions come into force.
South Korea is the fourth-largest importer of Iranian oil. The East Asian nation is trying to make up for the losses by striking deals with other Middle East countries like Saudi Arabia, the UAE, Kuwait, and Qatar.