Korea will be forced to halt oil imports from Iran due to European Union sanctions that will ban insurance on Iranian oil shipments from next month, the Seoul government said Tuesday.
"The country, too, has to suspend oil imports from Iran as the European Union (EU) is set to stop offering any type of insurance on Iranian oil imports while also suspending oil imports from Iran itself from July 1," the Ministry of Knowledge Economy said in a press release.
Currently, European firms cover 100 percent of protection and indemnity insurance on all Iranian oil shipments to Korea, according to the ministry.
South Korea purchased 9.4 percent, or about 87 million barrels, of all its oil imports from Iran last year, but the government said the scheduled suspension of oil imports from the Middle Eastern country will not greatly affect the country's economy.
"The government has been in active and continuous dialogue with other oil exporting nations to secure alternative sources of oil," the ministry said. "It will continue its efforts to help minimize the impact on the country's economy and businesses."
Moon Jae-do, the head of the ministry's resources development office, said the country has already replaced a "significant amount, though not all" of its oil imports from Iran, mostly with increased shipments from four other oil exporting countries: Iraq, Kuwait, Qatar and the United Arab Emirates.
In addition to efforts to keep oil prices down, the government will also work to help minimize the impact on the country's exports to Iran.
"Iran is our third-largest market in the Middle East, and therefore continued cooperation with Iran is important to our economy," Moon told a press briefing.
Korea's exports to Iran shot up 32 percent on-year to US$6.07 billion in 2011 with shipments to the Middle Eastern country in the first five months of this year soaring 40.5 percent from the same period last year to $2.9 billion.
"The government will continue to maintain a close watch on the country's oil supplies while also continuing its cooperation with the international community," the ministry said. (Yonhap)
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