By Park Si-soo
The government is expected to reduce crude imports from Iran in cooperation with the United States, which is set to impose tougher sanctions on the oil-rich Middle East country, suspected of pursuing a nuclear weapons program.
Washington has warned that all entities doing business with Iran’s central bank will be banned from accessing the U.S. financial system, a measure set to take effect from July. Tehran insists that its nuclear program is “entirely peaceful.”
Minister of Foreign Affairs and Trade Kim Sung-hwan had previously hinted at reducing the oil imports, while ensuring safeguards.
“I think something needs to be done to some extent to protect our companies,” Kim told reporters while visiting a U.S. military base in Gyeonggi Province to deliver New Year’s greetings, Friday. “Relevant ministries will hold discussions with companies to cope with the situation.”
Asked about the volume of Iranian crude the government is considering cutting, the minister said, “Korean firms will decide after monitoring developments between the two sides (the U.S. and Iran).”
He firmly denied a news report that the government had decided to halve crude imports from Iran.
Cheong Wa Dae was extremely circumspect in commenting on the matter amid concerns that a drastic cut could have a negative effect on Asia’s fourth-largest economy
“No decision has been made by the government with regard to sanctions on Iran,” Presidential spokesman Park Jeong-ha said. “A decision will be made in such a manner as to minimize the impact on our economy.”
The U.S. has increased pressure on the country to suspend oil imports from Iran, while Seoul is soliciting Washington’s cooperation in minimizing the economic impact on domestic firms.
Korea is the world’s fifth-largest crude importer and its oil shipments from Iran amounted to 72.6 million barrels last year, accounting for 8.3 percent of the total, according to the Korea National Oil Corp.
Robert Einhorn, U.S. special adviser for nonproliferation and arms control, will visit Seoul Monday to meet with ranking bureaucrats to press them into taking action.
Einhorn will be accompanied by officials including Daniel Glaser, the U.S. Treasury’s assistant secretary for terrorist financing, during his three-day trip.
The delegation will meet with officials at foreign and economy-related ministries to explain the details and implementation plans of the new sanctions.
The government is stepping up efforts to find alternative oil suppliers out of fear that the country may be forced to suspend or substantially reduce imports from Iran.
Prime Minister Kim Hwang-sik is now visiting Oman and the United Arab Emirates to explore the possibility of expanding oil shipments from these countries.
The government has also drafted a four-step energy-saving campaign, which will be implemented in phases according to the changing situation.
European Union leaders initially agreed to join forces in the U.S.-led sanctions with an Iranian oil embargo by the end of the month, but they are reportedly considering delaying phasing out contracts with Iran by six months.
The 27-nation bloc’s move is to make the break less painful for financially stressed nations that rely on Iranian crude — Greece, Italy and Spain.
Seoul last month added more than 100 names to a financial blacklist of Iranian firms and individuals, joining a fresh multinational effort to press Iran to scrap its suspected nuclear weapons program. But it did not announce a ban on imports of petrochemicals or crude oil.