The Korea Times close
National
  • Politics
  • Diplomacy
  • Defense
  • Labor & Environment
  • Law & Crime
  • Health & Welfare
  • Embassy
  • Seoul & Provinces
  • Education
  • Foreign Communities
  • Obituaries
  • Multicultural Youth Award
Biz & Tech
  • Auto
  • IT
  • Game
  • Manufacturing
  • Retail & Food
  • Energy
  • Construction
  • Airlines
Finance
  • Policies
  • Economy
  • Markets
  • Banks
  • Non-banks
  • Economic Essay Contest
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to the Editor
Lifestyle
  • Arts
  • Books
  • Travel & Cuisine
  • Trend
  • Fashion
  • Around Town
  • Fortune Telling
Entertainment
  • K-pop
  • K-dramas & Shows
  • Movies
  • Music
  • Performances
  • Asia Model Festival
Sports
  • Football
  • Golf
  • Baseball
  • Other Sports
World
  • Asia Pacific
  • Americas
  • Europe & Africa
  • SCMP
Video
  • On the Spot
  • Feature
  • News
Photos
  • Photo News
  • Darkroom
Community
  • The Korea Times
  • search
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
  • The Korea Times
  • search
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to the Editor
Tue, January 19, 2021 | 02:17
Ripples from Iran oil ban
Posted : 2012-06-27 18:10
Updated : 2012-06-27 18:10
Mail
Print Preview
Font Size Up
Font Size Down
Relief required for small and medium firms

Economic ripples are expected to be felt keenly as Iran threatened to halt all imports from South Korea in protest against Seoul’s decision to ban Iranian oil under sanctions imposed by the European Union.

Iranian Ambassador to Seoul Ahmad Masumifar said in an interview with Yonhap News Agency Wednesday that his country ``may decide to fully stop importing Korean goods’’ if Seoul slaps the import ban on Iranian oil.

The warning comes as South Korea will be forced to halt oil imports from Iran due to the EU’s ban on insurance of oil tankers transporting Iranian oil from July 1 as part of sanctions on Iran after it has resisted international pressure to give up its nuclear development program.

Earlier, we urged the government to make an all-out effort to tackle the anticipated fallout from the suspension of Iran oil imports but little has been done so far. It may be belated but the government should do what it can to minimize the impact.

It’s a comfort to hear that there would be little problem in securing crude thanks to efforts to date to diversify oil import sources. It’s also fortunate that crude prices remain stable in the aftermath of the eurozone debt crisis.

Most worrisome are small- and medium-sized companies that would take a direct hit. According to the Ministry of Knowledge Economy, about 2,900 Korean companies engage in trade with Iran and 2,700 of them are SMEs. They usually receive payments for merchandise exports from the money Tehran earns from selling oil to Korean refiners under a unique settlement system. Now the money barely amounts to 1.8 trillion won and SMES can’t get paid if oil imports from Iran are halted. Korea’s shipments to Iran amounted to $6 billion last year.

The situation becomes all the more serious should the Iranian envoy’s threat translate into action. The government says it will help SMES diversify to export to other countries but it won’t be easy to look for new markets in such a short span of time. Instead, they urge the government to expand soft loans.

Fundamentally, the government will have to consider continuing oil imports, following in the footsteps of Japan that passed a bill last week offering $7.6 billion in state guarantees for oil shipments from Iran to cover the insurance to be withdrawn by European insurers. This means that the government will offer payment guarantees that could reach as much as $7 billion to transport the oil.

This measure, however, could force the government to run a high risk in the event of a naval disaster and can be controversial because of the need to get approval at the National Assembly and possible privileges.

The biggest question is that it’s hard to foresee when the latest Iran crisis can be resolved. It is for this reason that the government should brace for the worst-case scenario on the assumption that the situation will be prolonged.









 
WooriBank
 
  • Man jumps to death inside shopping mall in Seoul
  • Foreign residents left out of digital-oriented banking service
  • Samsung heir Lee Jae-yong imprisoned again
  • Heavy snow advisory issued for Seoul
  • Lee's jail sentence casts cloud on Samsung's business
  • Moon calls on Biden to move forward from Singapore agreement with North Korea
  • Nosediving movie theater business hampers CGV sale plan
  • LG Energy Solution IPO could test Citigroup's friendship with SK
  • New virus cases at almost 2-month low on fewer tests, infections slowdown
  • It is premature to talk about pardons of two ex-presidents: Moon
  • Music publishing sector booming with high-profile sales Music publishing sector booming with high-profile sales
  • Boy group Cravity features in Airbnb's 'Inside K-pop' program Boy group Cravity features in Airbnb's 'Inside K-pop' program
  • Selena Gomez: Big Tech 'cashing in from evil' Selena Gomez: Big Tech 'cashing in from evil'
  • Betty White marks 99th birthday Sunday; up late as she wants Betty White marks 99th birthday Sunday; up late as she wants
  • A look ahead at ballet performances in 2021 A look ahead at ballet performances in 2021
DARKROOM
  • Second Trump impeachment

    Second Trump impeachment

  • Pro-Trump rioters breach the US Capitol

    Pro-Trump rioters breach the US Capitol

  • Our children deserve better (Part 2)

    Our children deserve better (Part 2)

  • Migrants hard hit by COVID-19: UN migration agency

    Migrants hard hit by COVID-19: UN migration agency

  • Happy New Year 2021

    Happy New Year 2021

WooriBank
  • About Korea Times
  • CEO Message
  • Times History
  • Content Sales
  • Media Kit
  • Contact Us
  • Location
  • Privacy Statement
  • Terms of Service
  • Mobile Service
  • RSS Service
  • Ombudsman
  • hankookilbo
  • Dongwha Group
  • Code of Ethics
Copyright