July 7, 2018
For the first time in six years, South Korea will not lift any Iranian crude and condensate in July, three sources familiar with the matter said on Friday.
The move comes amid US pressure to cut all Iranian oil imports from November 4.
“There was pressure from the South Korean government to halt purchases,” said the source familiar with Iranian shipping arrangements.
“South Korea overall is lifting zero oil (from Iran) for July loading.”
The move by South Korea, one of Iran’s main customers in Asia along with China and Japan, comes as it is in talks to seek an exemption from US curbs on buying Iranian oil, in line with a waiver it received during previous sanctions.
Two other sources said South Korea canceled July loadings of crude and condensate cargoes from Iran as it was uncertain whether the country would receive an exemption from US sanctions on Iran trade.
The cancellations mean South Korea will import no Iranian oil in August, the first month of zero imports since August 2012 when South Korean buyers put Iranian oil purchases on hold before getting a waiver to import limited amounts of Iran crude.
The United States in May said it was walking away from the 2015 international deal on Iran’s nuclear program. In late June, it demanded its allies halt all imports of Iranian oil from November and said exemptions were unlikely.
Washington warned countries they must stop buying oil from Iran starting November 4 or face financial consequences.
South Korean refiners have since curtailed their Iranian oil purchases and turned to alternative sources such as American and African crude due to expensive Middle East grades and uncertainty over trade with Iran.
South Korean buyers of Iranian crude and condensate are SK Energy and SK Incheon Petrochemical, owned by SK Innovation, Hyundai Oilbank Corp and Hanwha Total Petrochemical Co.
Japan, which reduced Iranian oil imports significantly during the previous Western sanctions on Tehran that were lifted in 2016, is also seeking an exemption from the latest US sanctions on Iran.
Japanese oil refiners may have to stop loading Iranian crude oil from October 1 if the government does not secure another exemption, the president of the Petroleum Association of Japan (PAJ) said last month.
Iran wants world powers to present measures guaranteeing oil revenue and investment into the country despite US sanctions when ministers meet on Friday to save the nuclear deal, but European states will fall short of its demands, diplomats said.
Foreign ministers from Britain, China, France, Germany and Russia will meet with their Iranian counterpart in Vienna for the first time since Trump left the pact, but diplomats see limited scope for salvaging it.