South Korea gets US exemption on Iranian crude oil imports

South Korea has received a waiver on the renewed U.S. embargo on imports of Iranian oil following months of negotiations between the allies, foreign media reported Monday.
The United States reimposed the oil sanctions against Tehran at the start of the day (Eastern Standard Time), a follow-up to President Donald Trump’s decision in May to ditch a 2015 nuclear deal signed by his predecessor, Barack Obama.
The Trump administration has threatened to take punitive measures against countries that purchase Iranian oil and hamper its aim to cut Iran’s oil exports to zero.
It gave them a 180-day grace period.
Last week, however, Secretary of State Mike Pompeo said eight “jurisdictions” would be allowed to continue to buy Iranian oil, adding they have pledged to or have already cut back on purchases of petroleum from Iran.
He said it’s a temporary waiver without naming the nations. According to foreign news reports later, South Korea is included in the list.
Reuters said, citing an unidentified source, that South Korea and India reached a deal with the U.S. on the issue.
It also mentioned Turkey, Italy, the United Arab Emirates, Japan and Taiwan, all of which buy a lot of Iranian oil.
Bloomberg also quoted a senior administration official as saying South Korea is among those getting waivers.
The Trump administration is expected to announce the list at 8:30 a.m. Monday (local time).
Iran provides around 2.5 million barrels of oil a day. A complete halt to its oil sales is expected to trigger sharp price hikes.
South Korean officials have tried to convince their American counterparts of why their country with no crude oil production should be exempted from the sanctions.
In particular, South Korea’s petrochemical industry is dependent on Iran’s condensate, or ultralight oil.
It’s hard to find an alternative, given its quality and production lines here adapted to Iran’s condensate, a government official said.
For the export-driven Asian economy, the continued purchase of Iranian oil is also important to maintain the won-based settlement of bilateral trade transactions.
South Korean refiners put money into bank accounts here for oil imports from Iran, whose firms pay for the purchase of South Korean products through them.
The two-way trade volume totaled $12 billion last year, with South Korea exporting $4 billion worth of products.

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