The government is reviewing plans to reduce oil imports from Iran to 2010 levels as part of efforts to reduce aftershocks of joining the U.S. sanction on Iran’s oil trade.
According to reports citing an unnamed government official, Seoul is reviewing plans to reduce oil imports from Iran as it seeks an exemption for Korea in the application of the U.S.’ National Defense Authorization Act for Fiscal Year 2012, and to prepare for possible developments in the region.
The National Defense Authorization Act for this year includes the so-called Kirk-Menendez amendment that prevents economic entities that deal with the Iranian central bank from doing business with U.S.-based financial institutions.
Since September 2010, South Korea’s crude oil trade with Iran has been conducted through Iranian central bank accounts set up with Industrial Bank of Korea and Woori Bank.
“Unlike other countries, Korea has increased oil imports from Iran, but returning it (volume of Iranian oil) to a year ago is deemed possible without much difficulty,” an anonymous government source was quoted as saying by a local news agency.
In 2010, Iranian oil accounted for 8.3 percent of Korea’s oil imports with 72.6 million barrels being shipped into the country. In the first 11 months of 2011, the number rose to about 83 million barrels or 9.7 percent of Korea’s overall oil imports.
Although the volume of Iranian oil coming into the country has increased significantly, reducing it back to the 2010 level is considered to be a relatively simple task as large investments are unlikely to have occurred in the past year.
In addition, the inflow of oil from the United Arab Emirates has decreased by a much larger margin during the period, giving Korea a possible alternative.
In 2010, Korea imported about 106 million barrels of oil from the UAE, but the figure dropped to 81.6 million barrels in the first 11 months of last year.
