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The South Korean delegation headed to Iran to hold talks to resume oil imports



(To add details and comment analyzers)

From Florence Tan and Jean Chung

SINGAPORE, November 9 (Xinhuanet) – A South Korean delegation including oil buyers is expected to go to Iran next week to discuss details of the return of Iranian oil imports after three months of absence, three sources said.

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

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

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South Korea's Iranian condensate imports reached 159,770 barrels per day from January to August, down 49 percent from 331,885 barrels per day in the same period last year, according to Reuters calculations based on data from the National Oil Company Korea Knock).

While exceptions gave South Korea the green light to continue Iranian oil imports, sources said problems such as payment, shipping and insurance needed to be resolved.

"Actual volume (imports) will depend on negotiations next week," said one source, adding that oil prices would be a key factor.

US sanctions have reduced pressure on Iran to cut oil prices against Saudi crude.

* South Pars Capacitor

From regular Iranian capacitor buyers SK Incheon Petrochem, SK Innovation petrochemical unit, Hyundai Chemical, Hyundai Oil Bank unit, and Hanua Total Petrochemical, a joint venture between Hanwa and Total France.

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

You still have to solve supply chain problems, "Fredon Vischey, chairman of FGI Energy Advisors, said at a forum in Singapore on Thursday.

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

But officials from both banks said balloon payments were still under consideration and there was no schedule set for their return.

The buyer is also likely to receive oil received by Iran using a tanker owned by Iran's national oil company. The United States has warned of possible accidents and the cost of Iranian tankers that are not protected by international insurance.

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

Emirates National Oil Company (ENOC), the main buyer of other South Pars products, also stopped imports.

South Pars exports, which averaged more than 300,000 barrels per day in the first half of this year, could fall below 200,000 barrels per day in the next two years, according to requests from South Korea and China.

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


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