South Korean buyers travel to Iran for talks on resumption of oil imports: sources

SINGAPORE / SEOUL (Reuters) – A South Korean delegation of oil buyers is expected to visit Iran next week to discuss a resumption of Iranian oil imports after a three-month shutdown, three sources said.

South Korea is one of eight countries to which the United States has refused to import Iranian oil for 180 days. It can import up to 200,000 barrels a day of Iranian oil, mainly condensate, without invoking US economic sanctions reimposed on Iran on Nov. 5.

The North Asian country was the third-largest Iranian oil buyer and the largest importer of its condensate before halting imports in September, ahead of the sanctions imposed by the United States.

South Korea's condensate imports from Iran reached 159,770 billion barrels a day in January and August, down about 49 percent from 311,885 barrels a day in the same period from last year, according to Reuters calculations based on data from Korea National Oil Corp.

Condensate is an ultra-light oil treated at the separator level, usually to produce petrochemical naphtha.

Although the waiver gave South Korea the green light to resume Iranian oil imports, sources said issues such as payment, shipping and insurance needed to be resolved.

"The actual (import) volume will depend on next week 's negotiations," said one of the sources, adding that the price of oil would be a key factor.

Waivers of US sanctions eased pressure on Iran to continue to discount its oil against Saudi Arabia.

SOUTH PARS CONDENSAT

SK Incheon Petrochem, a petrochemical unit of SK Innovation; Hyundai Chemical, a unit of Hyundai Oilbank; and Hanwha Total Petrochemicals, a joint venture between Hanwha Corp and Total in France, regularly buy Iranian condensate.

KNOC data showed that each of the three imported between 1 and 3 million barrels of condensate from South Pars per month during the first half of the year. "Having a waiver does not mean you have it in your pocket. You still have to work through the supply chain, "said Fereidun Fesharaki, chairman of the FGE Energy Council, at the Condensate and Naphtha forum in Singapore.

South Korea will pay for Iranian oil expressed in Korean won on frozen accounts managed by the Industrial Bank of Korea (IBK) and Woori Bank, according to a statement from South Korea's Foreign Ministry released on Friday. beginning of the week.

However, officials at both banks said that payments for Iranian oil in won were still under review and no recovery schedule had been set.

Buyers should also receive oil delivered by Iran with the help of oil tankers belonging to the National Iranian Oil Co. The United States warned of potential accidents and costs involving non-Iranian oil tankers covered by international insurance.

Den Syahril, an FGE analyst, estimates Iran has been storing around 20 million barrels of South Pars condensate since August, as demand dropped.

Another major buyer of South Pars, the National Oil Company (ENOC), also stopped imports.

Exports of South Pars, which averaged just over 300,000 b / d in the first half of this year, could fall below 200,000 b / d in the next two years, depending on demand from the United States. South Korea and China, said Fesharaki.