South Korea gets US exemption on Iran crude oil imports

South Korea has been granted a waiver from US sanctions on Iranian oil, a government official said on Monday.

South Korea, one of Asia’s biggest buyers of Iranian oil, last week asked the US for “maximum flexibility” after some of its construction firms cancelled energy-related contracts in the Islamic Republic because of financing difficulties.

The United States said on Friday it would temporarily allow eight importers to keep buying Iranian oil after it reimposed sanctions on the country’s crude flows from Monday, aiming to force Iran to curb its nuclear missile and regional activities.

Under US law, exceptions can be granted for up to 180 days.

“Petrochemicals are key to our economy, and we stressed that if we’re hit by the Iran sanctions, it would pose grave challenges to our whole economy,” the official said, requesting anonymity due to the sensitivity of the issue.

Iran’s biggest oil customers – all in Asia – have been seeking waivers to sanctions to allow them to continue buying some of the Islamic Republic’s oil.

Uncertainty

South Korea, the world’s fifth-biggest buyer of crude oil, mainly purchases an ultra-light form from Iran known as condensate.

Seoul also won an exemption from the US to continue financial transactions with the sanctioned Iranian central bank to facilitate oil imports, the official said.

In 2012, South Korea received a waiver on US sanctions by importing limited amounts of Iranian oil during the previous round of sanctions that were lifted in early 2016.

South Korean buyers have reduced their purchases of Iranian oil and found alternatives such as American and African crude in recent months due to expensive Middle East grades and uncertainty over trade with Iran.

In September, South Korea’s imports of Iranian oil fell to zero for the first time since 2012.