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Iranian oil exports to South Korea under threat from US sanctions on tanker transport

China and India have committed to their oil purchase plans from Iran, but exports to South Korea may be affected due to the impact of pending US sanctions on tanker transport, the head of the National Iranian Oil Company said.

“Customers have booked the sales … they (India and China) have and there is no problem there. Only South Korea has some issues regarding shipment and insurance,” NIOC’s Ali Kardor said on the sidelines of an industry event in Tehran.

“South Korea has some issues now because they didn’t have their own shipping and were outsourcing, like charter, so maybe that is why the issue,” he said. “But we told them that our ships are ready for you.”

As the countdown begins for the restoration of US sanctions on Iran, many shipping companies such as Maersk Tankers and Torm are already refusing to call on Iranian ports, fearing complications relating to the processing of freight and insurance-related payments.

South Korea is a sizable buyer of Iranian condensate. The country has been buying around 300,000 b/d so far this year.

Key buyers include Hanwha Total, South Korea’s largest petrochemical company runs a large steam cracker in Daesan, and SK Energy, which has a refining capacity of 840,000 b/d is another key customer.

Japan and South Korea are seen as the main Asian customers of Iranian crude likely to feel the impact of the US’ exit from the nuclear agreement, known as the Joint Comprehensive Plan of Action (JCPOA).

Over the weekend, Kardor put Iran’s oil exports in April at a record 2.6 million b/d, crude output at 3.9 million b/d, and production capacity at 4 million b/d.

Up to 1 million b/d of Iranian oil exports could by affected by the US move with Iran’s biggest oil buyers, China and India, expected to continue importing its oil.

Source: Platts

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