Seoul expects stable supply of Iranian oil following sanction exemptions
- 5 years ago
산업부, 국내 정유업계의 안정적인 원유 수급이 기대… 이란제재, 한국 경제에 미칠 영향은?
Iran has the fourth-largest proved crude oil reserves in the world.
One of its biggest customer is Seoul.
So naturally, Washington's decision to exempt South Korean firms from U.S. sanctions on Tehran was welcome news.
However, one question still lingers.
Is the country safe from the overall impact of the measures?
Oh Soo-young turned to some experts for their take on the matter.
Seoul's trade ministry expects a stable supply of oil flowing into the country,... as South Korean companies trading with Iran were granted temporary exemptions from Washington's sanctions on Tehran.
Vice Minister of Trade Cheong Seung-il told a meeting of energy business leaders on Tuesday that many uncertainties have now eased due to the waivers.
He expressed relief that Korean banks are able to maintain won-based transactions with Tehran's central bank -- not just for oil imports but also products that aren't subject to sanctions.
However, the exemptions only last up to 180 days,... and local experts are divided on how this could affect South Korea's economy.
Some say the sanctions will lead to a drop in global oil supply, which would inevitably raise oil prices.
Such a price hike would hurt South Korea in particular, given its heavy dependence on Iranian crude.
Goldman Sachs estimates that Iranian crude exports will fall to 1-point-1-5 million barrels a day by the end of the year, down from 2-point-5 million barrels in mid 2018.
"In 2017, Iran was the third largest provider of crude oil to South Korea when comparing imports. Saudi Arabia was the biggest and Kuwait second. U.S. sanctions on Iran might lead to energy supply problems in South Korea."
Meanwhile, some say impact will be limited... as there are alternative producers to choose from.
"Other oil producing countries such as Saudi Arabia or Iraq are likely to increase production. They can boost their exports and make up for any shortages from Iran."
While showing optimism over the recent developments, Vice Minister Cheong raised the need for coordination with Washington to iron out further uncertainties regarding its embargo on Iran.
He added there would be support for South Korean firms that are affected by the sanctions,... as well as measures to help small and medium companies diversify their export markets.
Oh Soo-young, Arirang News.
Iran has the fourth-largest proved crude oil reserves in the world.
One of its biggest customer is Seoul.
So naturally, Washington's decision to exempt South Korean firms from U.S. sanctions on Tehran was welcome news.
However, one question still lingers.
Is the country safe from the overall impact of the measures?
Oh Soo-young turned to some experts for their take on the matter.
Seoul's trade ministry expects a stable supply of oil flowing into the country,... as South Korean companies trading with Iran were granted temporary exemptions from Washington's sanctions on Tehran.
Vice Minister of Trade Cheong Seung-il told a meeting of energy business leaders on Tuesday that many uncertainties have now eased due to the waivers.
He expressed relief that Korean banks are able to maintain won-based transactions with Tehran's central bank -- not just for oil imports but also products that aren't subject to sanctions.
However, the exemptions only last up to 180 days,... and local experts are divided on how this could affect South Korea's economy.
Some say the sanctions will lead to a drop in global oil supply, which would inevitably raise oil prices.
Such a price hike would hurt South Korea in particular, given its heavy dependence on Iranian crude.
Goldman Sachs estimates that Iranian crude exports will fall to 1-point-1-5 million barrels a day by the end of the year, down from 2-point-5 million barrels in mid 2018.
"In 2017, Iran was the third largest provider of crude oil to South Korea when comparing imports. Saudi Arabia was the biggest and Kuwait second. U.S. sanctions on Iran might lead to energy supply problems in South Korea."
Meanwhile, some say impact will be limited... as there are alternative producers to choose from.
"Other oil producing countries such as Saudi Arabia or Iraq are likely to increase production. They can boost their exports and make up for any shortages from Iran."
While showing optimism over the recent developments, Vice Minister Cheong raised the need for coordination with Washington to iron out further uncertainties regarding its embargo on Iran.
He added there would be support for South Korean firms that are affected by the sanctions,... as well as measures to help small and medium companies diversify their export markets.
Oh Soo-young, Arirang News.