Iran, South Korea close to deal to resume crude exports

A South Korean government source has said that his country is close to a deal with Tehran to resume buying Iranian crude as soon as September, Reuters reported.

South Korea, the fourth largest buyer of Iranian oil, stopped buying Iran’s crude in July because insurers, primarily based in London, had stopped covering tankers carrying Iranian oil.

The deal will require Iran to use its own tankers to transport the oil to the East Asian country, thereby shouldering the insurance risk.

EU insurers underwrite most maritime shipping, and insurers elsewhere have been unable to offer cover for the billions of dollars in claims that could stem from a spill.

The deal is being struck between South Korean refiners and the National Iranian Tanker Company.

SK Energy and Hyundai Oilbank are the only two South Korean refiners that import Iranian crude.

"Refiners have requested Iran to deliver crude, and the deal is almost reached," a government source told Reuters.

The refiners would buy a similar quantity of oil as they had prior to the July stoppage, sources said. There may be some variance month by month due to the size of vessels available for imports from the National Iranian Tanker Company (NITC), the source said.

Tehran offered to provide up to $1 billion of insurance cover to Iranian vessels shipping oil to South Korea, Reuters reported last month.

The EU sanctions came into force on July 1, after new U.S. sanctions targeted at financial transactions for oil purchases took effect in late June.