A South Korean delegation heads to Iran for talks to resume oil imports

A South Korean delegation heads to Iran for talks to resume oil imports

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From Florence Tan and Jean Chung

SINGAPORE, Nov. 9 (Xinhuanet) – A South Korean delegation including oil buyers is expected to head to Iran next week to discuss details of resumption of Iranian oil imports after a three-month hiatus, three sources said.

South Korea is one of eight countries that have received exemptions from the United States to continue importing Iranian oil for 180 days. The sources said they could import up to 200,000 barrels per day of Iranian oil, mostly condensate, without violating the economic sanctions that the United States imposed on Iran on November 5.

South Korea is Iran's third-largest oil buyer and its biggest importer of condensates before it stopped imports in September ahead of US sanctions.

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South Korean imports of Iranian condensates reached 159,770 barrels a day from January to August, down 49 percent from 331,885 barrels a day in the same period a year ago, according to Reuters calculations based on data from the National Oil Company of Korea Knock).

While the exemption gives South Korea the green light to resume imports of Iranian oil, sources say problems such as payments, shipping and insurance need to be resolved.

"The actual volume (of imports) will depend on the negotiations next week," one source said, adding that the price of oil would be a key factor.

US sanctions have eased pressure on Iran to cut its oil price against Saudi crude.

* South Pars capacitors

Of the regular purchasers of the Iranian capacitors SK Incheon Petrochem, SK Innovation's petrochemical unit, Hyundai Chemical, the unit of Hyundai Oil Bank, and Hanua Total Petrochemical, the joint venture between Hanwa and Total France.

Each of the three companies imported between one million and three million barrels of South Pars condensates per month in the first half of the year, according to CNOOC data.

You still have to solve the supply chain problem, "Fredon Vischey, chairman of FGI Energy Advisory, told a forum in Singapore on Thursday.

South Korea will pay the price of Iranian oil in Korean currency in the escrow accounts managed by the Korean Industrial Bank and Wory Bank, according to a statement issued by the South Korean Foreign Ministry this week.

But officials from the two banks said the balloon payments were still under consideration and no schedule had been set for their resumption.

Buyers are also likely to receive oil received by Iran using tankers owned by Iran's national oil company. The United States has warned of possible accidents and costs of Iranian tankers not covered by international insurance.

Iran's oil reserves are about 20 million barrels of South Pars capacitors, which have been stockpiled since August, with demand falling, according to Dane Shahrel, analyst at FGI.

Emirates National Oil Company (ENOC), another major buyer of South Pars products, also stopped imports.

South Pars exports, which averaged more than 300,000 bpd in the first half of this year, could fall below 200,000 bpd in the next two years, on demand from South Korea and China.

(Prepared by Moataz Mohammed for the Arabic – edited by Amal Abu Al Saud)

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