South Korean Finance and Strategies Minister Bahk Jae-wan said the UAE and Saudi Arabia have vowed to boost oil supplies to Seoul if it agrees to halt Iranian oil imports.
“UAE and Saudi Arabia have promised to provide more oil now if things get worse. They promised to fill the gap,” the minister told reporters on the sidelines of a meeting with Emirati officials in Abu Dhabi. Bahk did not disclose the exact amount of oil that would be provided by the Gulf producers.
The US and EU have imposed economic sanctions on Iran in their bid to put pressure on the Islamic Republic and starve it from oil revenues which contribute majority of the fiscal budget. The West insists that Iranian civilian nuclear programme will be used for the production of nuclear weapons. Tehran rejects the charge and insists it is for the production of electricity.
“I still have not decided on an interruption of oil imports but some companies have begun to reduce imports from Iran (on their own),” Bahk said.
Several OPEC members with huge spare capacity have ramped up their oil production in order to meet the additional demand from countries that have halted oil imports from Iran. Reports suggest Saudi Arabia extracted about 10 million barrels per day in April while the UAE produced about 2.7 million bpd during the same period. Riyadh has a total capacity of 12.5 million bpd while Abu Dhabi’s capacity stands at 2.7 million bpd.
Bahk hinted last week Seoul would eventually agree to reduce its crude imports from Iran and abide by US-led sanctions against the Tehran.
Sources disclosed South Korea will join the growing list of countries including China, Japan, and India, which are curtailing their purchases from Iran as Western sanctions prevent oil shipment payments and guarantees.