Seoul granted waiver to buy Iranian oil

South Korea was granted a waiver that will temporarily allow it to continue importing Iranian oil after the US reinstated all sanctions on Iran on Monday, according to the US State Department.

The US granted the waiver to eight countries, including China and India, the biggest buyers of Iranian oil, to keep crude oil prices stable. The countries will be able to buy Iranian oil for up to 180 days despite the reimposed sanctions. 

Seoul was also granted an exemption to continue financial transactions with Iran’s central bank, allowing South Korea to continue trading oil as well as nonsanctioned items with Iran, Seoul’s Foreign Ministry said.

Seoul hailed the move as a sign of the strong alliance between Seoul and Washington.

South Korea, one of Asia’s biggest buyers of Iranian oil, had asked Washington for an exemption, given that petrochemicals are key to its economy and the sanctions would exact a toll on the country’s businesses.

“(We explained to the US that) if South Korean firms are hit due to the sanctions against Iran, it would pose a problem to the nation’s economy,” said an official from the Foreign Ministry on condition of anonymity.

South Korea, the world’s fifth-biggest crude oil buyer, mainly imports an ultralight form of crude oil, condensate, from Iran, which accounts for 74 percent of its oil purchases from that country.

South Korean refiners have reduced their oil imports from Iran since the US pulled out of the Joint Comprehensive Plan of Action, a nuclear deal with Iran, in May. In September, there was no import of Iranian oil, according to the nation’s state-run oil agency.

In accordance with its agreement with the US, the government did not reveal how frequently the waivers will need to be renewed or by how much buyers would need to cut back on oil imports from Iran to avoid penalties.

“We have also told the US that we cannot accept non-allies to the US -- such as China -- benefitting from the ally’s (South Korea’s) sacrifice,” the official said. China has publicly defied the US call for curbs on oil imports from Iran.

Washington in May withdrew from a 2015 nuclear deal signed between world powers and Iran under which international sanctions against Iran were lifted in return for curbs on its nuclear program. Other parties to the deal, including Britain, France, Germany, China and Russia, have said they will not leave the deal.

The US says the sanctions, which US Secretary of Pompeo billed as the “toughest sanctions ever,” are aimed at persuading Iran to “alter” its behavior, including its support for regional terrorist groups like the Hezbollah and its development of long-range ballistic missiles.

The sanctions are designed to push Iran’s exports to zero.

Iranian President Hassan Rohani said in speech broadcast on state TV on Monday that Iran would break the sanctions and continue to sell its oil.

(laeticia.ock@heraldcorp.com)