After Japan, South Korea seeks to avoid U.S. sanctions against Iran oil imports

16-Dec-11

USA is likely to impose new sanctions that threaten to hinder the flow of oil from Iran by shutting down payment channels for Iranian crude. If this was to occur, South Korea along with Japan could seek a waiver, as per Reuters. The U.S. legislation allows for a waiver for countries that have cooperated with the United States in pressuring Iran to halt its nuclear program. Seoul will probably seek an exemption from US legislation that threatens reprisals in the United States for financial institutions that deal with Iran's central bank. If this fails, it may seek a grace period to make new arrangements and avoid falling foul of the sanctions. Iran supplies about 10% of the oil required by South Korea (world's fifth-largest crude importer) to feed its industrialised, export-driven economy. South Korea imported US$350 mln worth of Iranian petrochemicals last year, while exporting US$450 mln worth of its own petrochemicals to Iran. South Korea is expected to announce additional sanctions on Iran as early as this week, akin to those imposed on Iran by Japan, and are unlikely to include a ban on importing crude from Iran.