South Korea imported just over 176,000 barrels per day of Iranian crude oil in June, down about a quarter from a year ago, as shipments wound down ahead of a complete halt in July due to an EU ban on insuring tankers carrying Iranian oil.
The world’s No.4 buyer of Iranian crude imported 34.51 million barrels from Iran during the first six months of this year, down 17.1 percent from the same period a year ago, data from state-run Korea National Oil Corp showed on Monday.
South Korea became the first major Asian consumer of Iranian crude to announce a halt to imports after the government said last month that shipments would be suspended from July 1 due to the European Union insurance ban.
South Korea imported 176,467 barrels per day (bpd) of Iranian crude in June, compared with its combined term-agreements to import 200,000 bpd this year.
Of South Korea’s four refiners, only SK Energy and Hyundai Oilbank import Iranian crude.
The United States and the European Union accuse Iran of trying to build nuclear weapons, while Tehran says its program is strictly for civilian purposes.
The United States in June extended exemptions from its tough new sanctions on Iran’s oil trade to South Korea and six other economies. But the EU’s insurance ban makes it almost impossible to ship Iranian oil as most insurance is undertaken by EU-based companies.
To plug the Iranian supply cuts, South Korea has turned to other Middle Eastern producers, including the world's top exporter Saudi Arabia, the United Arab Emirates (UAE), Kuwait and Qatar.
Shipments from Kuwait in the first six months rose 24.2 percent to 361,560 bpd, while those from Saudi Arabia rose 6.2 percent to 832,324 bpd.
Imports from the UAE decreased 1.3 percent to 247,830 bpd, the KNOC data showed.
January-June imports from Qatar rose 7 percent to 280,253 bpd.
Unlike Japan, South Korea does not consider providing sovereign guarantees to insure Iranian oil shipments and get round the EU embargo.
South Korea has, however, imposed curbs on exports of goods to Iran to reduce the risks of payment defaults.