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South Korea hikes Iran crude imports 20 percent in 2011

South Korea hikes Iran crude imports 20 percent in 2011

Imports from Iran at 238,860 bpd in 2011, up 20 pct yr/yr; Total crude imports up 6.2 pct y/y in 2011-KNOC; Middle East supplies 87 pct of S.Korea's 2011 crude

January 25, 2012 2:18 by

South Korea imported 20 percent more crude from Iran in 2011 than in the previous year, an increase that outpaced the overall growth of six percent in shipments to the world’s fifth-largest importer in 2011.

Under new US sanctions imposed on Iran, Seoul will need to reduce imports in coming months to convince Washington it is playing a role in efforts by the US and its allies to halt Tehran’s nuclear programme.

Crude imports from Iran stood at 238,860 bpd in 2011 versus 198,918 bpd in 2010, the state-run Korea National Oil Corp (KNOC) said on Wednesday.

South Korea imported 2.54 million barrels per day (bpd) of crude oil last year, compared with 2.39 million bpd a year ago, the KNOC data showed.

Asia’s fourth-largest economy argues it would have difficulty in replacing Iranian crude supplies, which account for nearly 10 percent of its crude oil imports.

Heavily dependent on imported crude, Seoul has not committed publicly to cutting imports from Iran, in contrast to Japan, another big buyer of Iranian crude.

Of the four South Korean crude oil refiners, SK Energy and Hyundai Oilbank import Iranian crude oil. The two refiners struck annual deals to buy a total of 200,000 bpd of Iranian crude this year, a little more than the 190,000 bpd in 2011, but are also keeping an eye out for potential replacements.

Tehran has faced a growing array of U.N. and unilateral sanctions for years, but a U.S. bill that President Barack Obama signed into law on New Year’s Eve went further than previous measures, aiming to stop countries paying for Iranian oil.

South Korea has some $5 billion in money owed to Iran’s central bank for crude oil imports trapped in its banking system because of the difficulty of sending money to Iran without falling foul of U.S. sanctions.

South Korea sourced 87 percent of its total crude imports last year from the Middle East — mainly Saudi Arabia, Kuwait, Qatar, the United Arab Emirates and Iran — up from 82 percent in 2010, according to KNOC data.

Refinery profit margins eased to $4.50 a barrel in December after hitting a year high of $5.67 a barrel in October, and crude runs rose 6 percent last year from a year earlier to 2.53 million bpd helped by firm regional demand.

Oil product exports gained 25.5 percent in December on the year to 37.04 million barrels, and last year saw a 19 percent year-on-year rise to a record high of 407.88 million barrels, according to KNOC data.

Private oil inventories at the end of December stood at 58.76 million barrels, up 6.7 percent from a year earlier. (Reporting by Cho Mee-young and Eunjee Park; Editing by Simon Webb) *image from

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