South Korea Receives No Iranian Crude for 4th Month

South Korea imported no Iranian crude for the fourth straight month in December due to the re-imposition of US sanctions on Tehran, while intakes from the US and Kazakhstan rose sharply as alternative sources, data released by Korea National Oil Corp showed.

South Korea has fully suspended crude imports from Iran since September 2018, marking the first time Asia's fourth biggest oil consumer has taken no Iranian cargoes for more than three months since September 2012, amid then US-led sanctions on Iran, S&P Global Platts reported Friday.

For the full 2018 year, Iranian crude imports plunged 60.1% to 58.2 million barrels from 147.87 million barrels in 2017. The 2018 import volume was the smallest since 2015, when South Korea imported 42.4 million barrels.

To make up for the loss of Iranian barrels, South Korea's crude imports from the US surged more than six times to 13.61 million barrels in December from 2.07 million barrels a year earlier.

The volume was the largest since South Korea began importing US barrels in September 2014. The December imports were also double the 6.66 million barrels imported in November.

South Korea has also increased imports of Nigeria's Escravos condensate as another alternative to Iran's South Pars. It imported 1.22 million barrels from Nigeria in December, the KNOC data showed.

"We can continue buying lighter oil from Nigeria and other African counties this year as alternatives to Iranian grades because it is uncertain whether the 180-day waiver is being extended," an official at SK Innovation said. KNOC's next monthly data release will likely indicate that South Korea resumed importing Iranian oil in January, as the country's biggest refiner SK Innovation received 2 million barrels of South Pars condensate this month.

The refiner took its first delivery of 1 million barrels on January 19 and is due to take the second delivery on January 31.

Hyundai Oilbank also plans to receive its first cargo of 1 million barrels South Pars condensate in mid-February, a company trading source with direct knowledge of the matter.

Hanwha Total is set to take delivery of around 3 million-5 million barrels of South Pars condensate in February, according to a separate source.

South Korea was granted a six-month exemption for Iranian crude imports after agreeing to reduce its purchases "significantly" when US sanctions against Tehran came into force in early November.

source: Financial Tribune