Seoul Considers Cutting Oil Imports from Iran by Half

      January 13, 2012 10:30

      The government is considering cutting imports of Iranian crude oil by half to support U.S. sanctions against Tehran, it emerged on Thursday. Iranian crude accounted for nearly 10 percent of Korea's total imports last year.

      A senior government official said, "We'll have to join the U.S. sanctions against Iran over its suspected nuclear development since the U.S. and the international community are cooperating in dealing with the North Korean nuclear issue."

      Korea imported a total of 82.59 million barrels of crude oil from Iran from January to November last year, accounting for 9.7 percent of oil imports. Economic ministries are reportedly pushing for a reduction of only 10-20 percent because they fear a severe impact on the economy if imports from Iran are cut by half.

      Korea is expected to suffer a significant blow even if it succeeds in finding alternative sources in Saudi Arabia or the U.A.E., because Iranian crude is about US$3-6 cheaper per barrel than oil from other Middle Eastern countries.

      The new U.S. Defense Authorization Act bans foreign financial entities from any dealings with Iran's central bank, which amounts to a de-facto global embargo on Iranian oil. The act takes effect in July after a six-month grace period.

      The government will offer to cut imports and seek an exemption from the act because it wants to avoid a situation where it can import no crude at all from Iran.

      Meanwhile, Robert Einhorn, the State Department's special adviser for nonproliferation and arms control, arrives in Seoul next Monday to discuss sanctions against Iran.

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