S. Korea to Increase Oil Supply From Iran

S. Korea to Increase Oil Supply From IranS. Korea to Increase Oil Supply From Iran

South Korea is eager to increase the diversity of its oil suppliers by looking at Iranian and US supplies as more exports from those countries become available, the South Korean Ministry of Trade, Industry and Energy said on Wednesday.

The country welcomed the scheduled lifting of sanctions against Iran and the recent repeal of the 40-year crude export ban in the US, the ministry statement said, Economic Times reported.

"If the sanctions on Iran are lifted, refiners expect to hike their Iranian crude imports to the level seen before the sanctions were imposed," the statement said.

Refiners hope to import US condensate as supply of the light oil in Asia is now tight, it added.

South Korea is the world's fifth-largest crude importer and one of the major buyers of Iranian oil.

South Korean refiners will look at importing supplies of US condensate should US benchmark West Texas Intermediate price drop to a discount of between $4-$6 a barrel to Middle East benchmark Dubai, the statement said, citing the refineries.

February WTI futures were trading at $36.40 per barrel on Wednesday while the February Dubai swap is at $33.08 a barrel.

South Korea's crude oil shipments from Iran fell nearly 30% in November from a year ago, with imports in the first 11 months of 2015 falling 0.8% and meeting sanction requirements over Tehran's nuclear program.

The US Congress this month voted to lift a 40-year ban to export domestic crude supplies, and although no immediate large-scale exports are expected, this does mean that some American oil will flow into the global market next year, shifting the oil balance.