Korea Exempt from U.S. Embargo on Iranian Oil

  • By Jeong Si-haeng, Ahn Jun-yong

    November 06, 2018 09:29

    The U.S. on Monday resumed energy and financial sanctions against Iran, but Korea, China, Japan, India, Turkey and three other countries are exempt on condition that they drastically curtail oil imports.

    The U.S. State Department and Commerce Department slapped the fresh sanctions on Iran after U.S. President Donald Trump unilaterally pulled out of an international denuclearization deal with Tehran in May.

    The U.S. government allows Korea and the seven other countries to import Iranian oil for 180 days. That means Korean companies will be able to import Iranian crude oil and condensates, but curtailing purchases is expected to hurt Korean petrochemical companies.

    The sanction aim to block international trading of Iran's key exports of crude oil, natural gas and petrochemical products and prohibit dealing with Iranian energy, shipping and shipbuilding companies and the Central Bank of Iran.

    More than 700 Iranian businesses and individuals have been blacklisted, and foreign governments, businesses and citizens who engage in business with them face fines, a ban on financial and trading activities with the U.S. and having their U.S. assets frozen. 

    U.S. Secretary of State Mike Pompeo (left) and Treasury Secretary Steven Mnuchin speak to reporters during a press conference in Washington on Monday. /EPA-Yonhap

    Excluding China, India and Korea, which are the biggest buyers of Iranian crude oil, will take some of the bite out of the measures, and the EU, which has not withdrawn from the deal, is boycotting the sanctions.

    Countries excluded from the U.S. sanctions can import Iranian crude oil for six months before seeking approval from Washington to continue imports.

    Last year, Korea imported 148 million barrels of Iranian crude, which accounted for 13.2 percent of the country's total oil imports, the third largest after Saudi Arabia and Kuwait.

    The Foreign Ministry said, "According to a bilateral agreement, specific details including the level of the crude oil import cut will not be revealed."

    Korea also won permission from the U.S. to settle the imports through won-denominated bank accounts the Central Bank of Iran opened at Industrial Bank of Korea and Woori Bank.

    Iran deposits the proceeds in the accounts, while Korean companies that export products to Iran withdraw money from it.

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