South Korea’s Lee to start Middle East crude talks Tuesday

South Korea’s Lee to start Middle East crude talks Tuesday

South Korean President Lee Myung-bak will hold meetings with major crude suppliers Saudi Arabia, Qatar and the United Arab Emirates from Tuesday through Friday, as the country looks for alternatives to Iranian oil.

February 6, 2012 2:55 by Reuters

Iran is facing toughened US sanctions that make it difficult for buyers to pay for the crude. Countries that reduce imports can secure a waiver, but South Korea last year increased Iranian imports by a fifth, and has set annual deals for slightly more this year.

Lee over the weekend visited Turkey before heading to Saudi Arabia on Tuesday, said a statement from the presidential Blue House on Sunday.

The presidential office a week earlier said Lee’s visit to the Middle East was to secure “stable sources of energy.”

His visit comes less than a month after the country’s Prime Minister Kim Hwang-sik visited Oman and the United Arab Emirates.

South Korea, the world’s fifth-largest crude oil importer, sourced some 87 percent of its crude imports from the Middle East last year, with 9 percent coming from Iran.

It imported 2.54 million barrels per day (bpd) of crude oil last year, with its top five suppliers Saudi Arabia, Kuwait, Qatar, the United Arab Emirates and Iran.

The United States has pushed Asian countries to cut crude supplies from Iran in a bid to pressure Tehran to rein in its nuclear ambitions, which Washington suspects are aimed at making nuclear weapons, while Iran agues that is for peaceful means.

Iran has threatened to close the Strait of Hormuz, the world’s most important shipping lane for crude, if sanctions are imposed on its oil exports.

South Korea, like Japan, the world’s third biggest oil consumer, will meet US officials in Washington to ask how much oil they can import from Iran under new sanctions.

Government officials and local media have said the sanctions leave the country with few alternative sources of energy.

South Korea’s imports of Iranian crude surged 20 percent in 2011 to 238,860 barrels per day (bpd) last year, state-run Korea National Oil Corp (KNOC) said last month.

South Korea owes Iran’s central bank some $5 billion for crude oil imports, but the money is trapped in its banking system because of the difficulty of sending money to Iran without falling foul of US sanctions. (Reporting by Cho Mee-young; Editing by Michael Urquhart) *image of South Korean President Lee Myung-bak placed above from Reuters