Monday 17 June 2024

S Korean refiner lifts Iranian crude cargo

Seoul, October 5, 2012

South Korean refiner Hyundai Oilbank has loaded a cargo of crude in Iran for delivery later this month, a company source said on Friday, while a cargo for refiner SK Energy arrived this week as Seoul resumes imports following a two-month gap.

The north Asian country has restarted Iranian oil imports of about 6 million barrels per month, or 200,000 barrels per day (bpd) 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, refining and government sources said.

"Hyundai Oilbank lifted its first Iranian crude last week and it is expected to arrive later this month," said a company source who declined to be identified.

Among South Korea's four refiners, only SK Energy and Hyundai Oilbank import Iranian crude.

A spokesman at SK Energy's parent firm, SK Innovation , said its first Iranian cargo for this month arrived at the port of Ulsan on Tuesday.

He declined to comment on the fate of its second cargo, but a government source has said it has already been loaded and should arrive later this month.

All three cargoes -- of two million barrels each -- should be able to clear customs this month based upon arrival dates.

The resumption of imports is unlikely to hinder South Korea's bid to extend a U.S. sanction waiver in December as this year's imports are still down sharply from a year ago.

South Korea's imports from Iran during the first eight months were 38.77 million barrels, or about 159,000 bpd, down nearly a third from a year ago, according to data from state-run Korea National Oil Corp.

The world's fifth-largest crude importer, however, is set to remain under pressure to cut Iranian crude imports.

"The United States wants to see us import no Iranian crude ultimately," said a government source with direct knowledge of the matter.

A total of 6-7 trillion won ($5.4-$6.3 billion) was being held in Iran's won-denominated accounts at Industrial Bank of Korea and Woori Bank, both owned by the government, said the source, who declined to be identified due to the sensitivity of the matter.

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 $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 U.S. sanctions aimed at squeezing Tehran's oil income to curb its nuclear programme suspected of developing weapons.

Tehran says it is strictly for developing nuclear power.

SK Energy's term deals with Iran this year are to import two Very Large Crude Carriers (VLCCs) of crude per month, or 4 million barrels, while Hyundai Oilbank imports one VLCC, according to an economy ministry source. – Reuters

Tags: Oil | Iran | South Korea | Hyundai Oilbank | Seoul |

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