South Korea Increases Oil Deal with Iran
South Korea has made an agreement to increase its oil business dealings with Iran and helping to sabotage U.S. economic sanctions against the Iranian Republic.
The southeastern Asian nation announced Wednesday that it will buy around 10 percent of its crude from Tehran this year, a slight increase over 2011. SK Energy will buy the additional crude, taking a total of about 130,000 bpd (barrels per day) in 2012. Hyndai Oilbank, the other importer, will take 70,000 bpd, but said it is making contingency plans for any interruption in supplies.
"We are planning for various scenarios, including diversifying supply lines, if the situation changes," a company spokesman said.
Iran has threatened to shut the Strait of Hormuz, thereby choking off a major oil shipping lane through which some 40 percent of the world's oil is delivered to the rest of the world. The threat, which appeared to be another move in the chess game being played out over its global nuclear ambitions, was brushed aside by the U.S., who warned that any attempt to close the Strait would be regarded as "an act of war."
South Korean refiners purchased 190,000 bpd (barrels per day) from Iran last year, according to the Reuters news agency. The country, which rates as the fifth-largest oil importer in the world, will meet with the U.S. to request an exemption from sanctions signed into law by President Barack Obama on Saturday. The sanctions could block refiners from paying for Iranian oil.
Likewise, the European Union is also considering measures to ban its member nations from importing Iranian crude.
Both moves are intended to convince Iran to at least slow down, if not entirely halt its nuclear development activities. Israel, the U.S., most European nations and a fair number of Arab nations as well are convinced that Iran is racing to create a nuclear weapon.
China has not yet agreed to sign oil deals with Iran this year, and meanwhile cut its imports from Tehran by more than half in January. Instead, Beijing is starting to purchase its crude from Russia, Vietnam, West Africa and Iraq, according to Reuters.
Top oil exporter Saudi Arabia is a likely candidate to supply South Korea as well, if the Asian nation decides to seek its supplies elsewhere.