South Korean oil refiners heaved a sigh of relief as Korea was reportedly included among the eight nations that the United States agreed to give oil waivers under its resumed sanctions against Iran.
The U.S. government has yet to officially announce the list of exceptions to the sanctions against Iran, which were resumed at midnight on Nov. 5 (U.S. local time) but foreign media including Bloomberg and Reuters reported that South Korea is included in the list.
Oil and petrochemical products made from crude oil are Korea’s key export items along with semiconductors and automobiles. For this reason, Korean oil refiners have been paying keen attention to whether Korea will be included among the countries that would be allowed to keep importing Iranian oil under the second stage of U.S. sanctions against Iran.
Industry insiders say that Korea will be allowed to import approximately 200,000 barrels of Iranian oil a day.
Among major oil refineries in Korea, SK Energy, Hyundai Oilbank, and Hanwha Total are likely to benefit from Korea’s exclusion from the U.S. sanctions against Iran. S-Oil and GS Caltex do not import crude oil from Iran.
SK Energy, Hyundai Oilbank and Hanwha Total import Iranian oil in the form of condensate, a type of ultra-light oil.
Condensate is considered to be the best type of crude oil for extracting naphtha as it can produce more naphtha, which is the basic ingredient of petrochemical products, than ordinary crude oil.
The three companies that have relied on Iranian condensate tried to diversify their import sources to Africa, Australia, Russia and the U.S., but could not secure a stable supply. In this regard, they are relieved by the U.S. government’s decision to allow Korea to continue to import oil from Iran.