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South Korea April Iran crude imports up 42 percent Y/Y -KNOC
Imports over 250,000 bpd Iran crude in April vs. term 200,000 bpd; Jan-April Iran crude imports at 208,700 bpd, down 10 pct yr/yr; Saudi, Kuwait, UAE, Qatar plug the gap with higher supplies; South Korea's total crude imports down 3.7 pct in April y/y
May 29, 2012 12:15 by Reuters
South Korea imported 7.5 million barrels of Iranian crude oil in April, up 42 percent from a year ago, just months before it faces crude imports possibly being suspended from July due to a European insurance embargo on Iranian oil shipments.
U.S. sanctions also kick in from late June.
South Korea imported 25.25 million barrels from Iran during the first four months of this year, down 10 percent from 28.1 million barrels during the same period a year ago, data from state-run Korea National Oil Corp showed on Tuesday.
The jump in April contrasts sharply with imports in March, which fell 40 percent from a year ago to 155,000 barrels per day as South Korea slashed Iranian imports.
“This (increase in Iran crude oil imports in April) might be because they are importing more in advance due to given notice about halting Iran crude oil imports,” said Yoo Young-kook, senior analyst at KTB Investment & Securities Co. Ltd.
Seoul imported more than 250,000 barrels per day (bpd) of Iranian crude in April, compared with its term import agreement at 200,000 bpd this year.
“Another scenario is that there might be an expectation that Iran sanctions will be resolved positively so the purchase is increasing,” Yoo said.
Of South Korea’s four refiners, only SK Energy and Hyundai Oilbank import Iranian crude. The two refiners struck annual deals to raise purchases from Iran this year from around 190,000 bpd in 2011, government sources and company officials said.
SK Energy will stop Iranian oil imports after European Union insurance ban takes effect, two sources with direct knowledge of the matter said earlier this month.
Hyundai Oilbank will halt Iranian imports from June, other sources have said.
This effectively makes South Korea the first of Iran’s major Asian customers to halt oil purchases from July 1.
But the South Korean government still holds out hope of resuming imports and has asked the European Union to grant it access to European insurance for Iranian oil shipments even after the July 1 embargo comes into effect, according to the Korean economy ministry.
South Korea, the world’s fourth-largest buyer of Iranian oil, is under pressure from the United States to cut imports to choke off the supply of hard currency to Iran, whose nuclear programme is suspected to be a cover for developing nuclear weapons.
South Korea has turned to other Middle Eastern producers including the world’s top exporter Saudi Arabia, the United Arab Emirates (UAE), Kuwait and Qatar to plug the cuts from Tehran, data from the state-run Korea National Oil Corp showed on Tuesday.
Shipments from Kuwait in January-April gained 15 percent to nearly 328,000 bpd, while those from Saudi Arabia rose 5 percent to about 825,000 bpd and increased almost 10 percent from the UAE to 250,000 bpd, the data showed.
From Qatar, the January-April import rose 10 percent to over 288,000 bpd, according to the data.
Imports of oil from Iran fell to 208,700 bpd in the first four months of this year, compared with over 234,000 bpd a year earlier.
A conversion to barrels per day from millions of barrels import was calculated based upon KNOC data.
South Korea sourced 86 percent of its total crude imports in the first four months of this year from the Middle East –mainly Saudi Arabia, Kuwait, Qatar, the United Arab Emirates and Iran — up from 84 percent a year earlier, KNOC data shows.
(Reporting by Meeyoung Cho; Additional reporting by Eunhye Shin; Editing by David Fogarty and Miral Fahmy)