South Korea has announced it will suspend imports of Iranian crude oil from July 2012 after the European Union confirmed that it would impose sanctions to cut off insurance services for crude shipments from the country
The development would make the country the first major Asian consumer of Iranian crude to halt imports.
Since European companies have a near monopoly on insuring oil tankers, the EU will ban them from insuring or reinsuring tankers transporting Iranian oil anywhere in the world.
“South Korea’s imports of Iranian oil will be suspended, as the EU will suspend crude imports from Iran and also halt its insurance and reinsurance cover on the crude imports from July 1,” said a joint statement from the Korean Ministries of Economy, Finance and Foreign Affairs.
South Korea did employ unsuccessful last ditch efforts to obtain extended access to insurance, but the country’s refiners relying on European companies for insurance would be unable to import such supplies.
EU governments have approved the embargo on Iranian oil, which will begin on July 1, and have warned Iran that more pressure would be put forward if it continued to defy international demands to limit its nuclear programme.
On average, South Korea relies on Iran for about 10 per cent of its crude oil requirement, which fell to 7.5 per cent for the first five months of 2012.
It imported 29.22 million barrels from Iran from January 2012 to May 2012.
