Not purchasing any oil from Iran for four consecutive months was not Seoul’s choice, it was indeed part of a strategy “premised on sagacity” to be able to win waivers from the United States, Ryu Jeong-hyun, South Korea’s ambassador to Tehran, told Shana on Saturday.
"My government was fully aware of the importance of importing Iranian crude oil for private refiners. For this reason we started lengthy negotiations with the US simultaneous to pressuring private oil buyers to cut their import from Iran," Ryu said.
Both plans were successfully implemented and South Korean oil companies will resume oil trade with Iran in January.
The senior envoy noted that a large number of South Korean enterprises depend on Iranian oil and chemical and petrochemical industries in his country would have suffered if their efforts to get waivers from US sanctions had failed.
"The waiver is for six months but it can be extended."
Reportedly, the Koreans imported 300,000 barrels of condensates per day from Iran before terminating their contracts in June. As per the waivers, the country can buy up to 200,000 bpd.
The diplomat added that the oil money, which will be kept in a Korean bank, cannot be transferred to Iran directly, nor can it be converted into other currencies. “Tehran can use the money to buy medicine, household appliances and food from Korean firms and settle its debt with the money.”
Asked about purchasing oil, gas and petrochemical equipment with the oil export revenues, he said, "Some of the equipment is still on the sanctions list. Details will be announced soon."
A South Korean-Japanese consortium signed a preliminary agreement worth $3 billion to develop Siraf Refining Park, a major downstream project in the city of Siraf in southern Bushehr Province, in 2017.
The ambassador said condensate imports will not be affected during the 180-day period.
Balancing Act
Recalling the low level of trade between Seoul and Tehran that reached $12 billion last year, Ryu added that Iran accounts for less than 1% of South Korea's export market. "We are interested in expanding commercial relations with Iran."
Seoul is trying to balance its commercial ties to Iran with its cordial political and trade relations with the US. South Korea is a close US ally and had stopped buying Iranian crude months before the sanctions came into effect on Nov. 4
“We cannot be oblivious to our national interest and the fact that US is a key business partner,” he told the news agency.
US goods and services trade with South Korea totaled $154 billion in 2017. Exports reached $72.5 billion and imports were at $82.3 billion.
The Trump administration agreed last week to let eight countries -- including Japan, India, China and South Korea – continue buying Iranian oil after it reimposed the new round of sanctions.
According to ISNA, the eight nations will comprise 75% of Iran's crude exports for six months.
Giving a breakdown, the news agency said China and India are allowed to purchase 360,000 and 300,000 barrels per day. The two countries imported twice as many before the re-sanctioning.
No figures have been announced regarding other oil importers, namely Japan, Iraq and Greece.
In the period between March and October, China, India and Japan's crude import from Iran amounted to 650,000, 560,000 and 170,000 bpd respectively.
