South Korea has not purchased any petroleum products from Iran for three consecutive months.
Oil Ministry's spokesman Kasra Nouri made the announcement, exposing the contradictory statements made by South Korea’s ambassador to Iran, Yu Chang Hwang, who claims his government is interested in doing business with Iran despite mounting US pressures not to do so, Shana reported.
Nouri said the Koreans were the first to zero oil imports from Iran in the wake of the first batch of US unilateral sanctions announced in May. Washington decided to reimpose new restrictions on the Tehran government and told oil-importing countries that they must either stop buying Iranian crude from Nov. 4 or face tough penalties including being cut off from the world’s biggest economy.
"Despite the positive statements that South Korean firms are eager to play a role in Iran's energy sector, not only has Seoul fully terminated its oil imports, but is trying to replace it with alternative sources."
The official added that prior to reimposition of sanctions, South Korea bought 53% of its condensates from Iran and its average oil imports from Iran amounted to 180,000 barrels per day.
South Korea, one of the biggest oil and gas importers in the world and one of Iran’s top clients in Asia, has cut off oil imports from Iran since July, halting all shipments for the first time in six years amid US pressure to cut all imports of Iranian oil from November.
Bijan Namdar Zanganeh, the oil minister, confirmed Nouri's statement, noting that Korea is the only country that does not buy Iranian crude anymore.
Traditional Customers
"Other traditional customers namely Japan, China and India have reduced loading Iranian oil but are still buying it," he said.
The government in Seoul pressured refiners into suspending orders for July shipments of Iranian crude, which is the first time this has happened since 2012.
South Korea is the world’s fifth-largest crude oil importer and diversity of supplies is vital. The last time sanctions were imposed on Iran, South Korea managed to score a waiver by pledging to cut the amount of crude it buys from Tehran.
According to Yu, a large number of South Korean enterprises are dependent on Iranian oil, so chemical and petrochemical industries in his country would suffer if their efforts to negotiate a waiver from the US sanctions fail.
Although the envoy stressed that Korean companies would continue to work with Iran despite the sanctions, Korea Herald announced in June that Daelim Industrial Company, a major South Korean construction firm, canceled a construction deal worth 2.2 trillion won ($2 billion) with an Iranian oil refining company.
The Korean company disclosed the cancellation of the deal with Isfahan Oil Refining Company in a report to the financial watchdog, the Financial Supervisory Service, South Korea's integrated financial regulator that examines and supervises financial institutions under the broad oversight of the Financial Services Commission.
The deal, signed in March last year, called for renovating and expanding a major refinery in Isfahan 400km south of Tehran.
The $2 billion contract was the equivalent of nearly 24% of Daelim's annual sales in 2015.
"(The deal) was canceled after funding was not completed because of the worsening external conditions, including economic sanctions on Iran," the South Korean company said.
Furthermore, Hyundai Engineering finalized a deal worth 3.8 trillion won ($3.2 billion) with Ahdaf Investment Company last year to construct a refining complex. Yet it is still "in talks with the Iranian side on whether to proceed with the business", the company said.
It was reported to be the biggest construction deal that a South Korea company has clinched in Iran.
