S&P Global Platts – South Korea imported no Iranian crude in September — for the first time since September 2012 — ahead of the looming reimposition of US sanctions on Tehran, preliminary data released by Korea Customs Service showed Monday.
In August, Hanwha Total was South Korea’s sole importer of Iranian barrels, taking 2 million barrels of South Pars condensate, down 84.2% from the total 12.63 million barrels of crude and condensate that South Korea imported from Iran in August last year.
Hanwha Total has long been Asia’s biggest buyer of South Pars condensate. As part of its efforts to make up for the loss of Iranian barrels, it increased imports of Australia’s NW Shelf condensate to 1.95 million barrels in August from around 500,000 barrels in previous months.
Hanwha Total has also tested South Arabia’s Khuff condensate and may consider purchasing the Saudi grade on a more regular basis, but has yet to find long-term alternative sources, market sources said.
The company has also said it could directly purchase naphtha, as it imports condensate as feedstock for producing naphtha, which means Hanwha Total could sharply reduce condensate purchases.
SK Innovation, South Korea’s other main buyer of Iranian crude, imported none in September for the second consecutive month. Instead, it has increased crude imports from Kuwait, Saudi Arabia and the US, including White Cliff crude and Eagle Ford.
Hyundai Oilbank, which has purchased South Pars condensate and other Iranian grades such as Iran Heavy and Forozan in the past, has suspended Iranian crude imports since August while increasing purchases of Forties from the UK and the ESPO from Russia.
Over January-September, South Korea’s imports of Iranian crude oil almost halved to 58.2 million barrels from 115.56 million barrels in the same period a year earlier.
In 2017, Iranian crude oil imports rose 32.1% on year to 147.87 million barrels. Its monthly imports of Iranian crude had increased from January 2016, when the US and EU lifted sanctions on Iran.
South Korea’s imports of Iranian barrels have fallen steadily since last November, when its imports from Iran fell 26.8% on year to 10.37 million barrels, as it pares back shipments in a bid to secure an exemption to the US’ reimposition of sanctions on Tehran.
The US has pressed Iran’s oil customers, including South Korea, to eliminate imports by November 4.
South Korea, one of the closest allies to the US in the Asia Pacific, requires US support and influence in its quest to denuclearize North Korea and improve diplomatic and economic ties with Pyongyang.
Meanwhile, South Korea’s crude oil imports from its biggest supplier Saudi Arabia fell 11% year on year to 3.41 million mt, or 25 million barrels in September, and were down 13% from August.
South Korea imported a total 10.83 million mt or 79.38 million barrels (2.65 million b/d) of crude oil in September, down 14.7% from 93.09 million barrels a year earlier.
It was the second consecutive month of decline on a year-on-year basis amid rising global crude prices. September imports were also down 16.4% from 94.99 million barrels in August.
Over January-September, total crude imports edged down 0.3% on year to 828.47 million barrels.