June 28, 2012 / 7:10 PM / in 6 years

Iran to review Seoul ties if oil imports suspended

DUBAI (Reuters) - Iranian Oil Minister Rostam Qasemi warned South Korea on Thursday that Tehran would reconsider ties with Seoul if the country stopped importing oil from Iran, the official IRNA news agency reported.

South Korea said on Monday it would halt imports of Iranian crude from July 1 due to a European Union ban on insuring tankers carrying Iranian oil, becoming the first major Asian consumer of Iranian crude to announce suspension of imports.

“If South Korea completely halts imports of Iranian oil, there will be a reconsideration in ties with this country,” Qasemi said according to IRNA, without elaborating.

The insurance ban makes it almost impossible to ship Iranian oil as most insurance is undertaken by EU-based companies. The move is aimed at putting pressure on Iran to halt what the United States and other western countries fear is a nuclear weapons program.

Tehran denies the charge, saying its peaceful nuclear program is aimed at generating electricity.

EU governments on Monday approved an embargo on Iranian oil to start on July 1 and warned Iran that more pressure could be put in place if it continued to defy international demands for limits on its uranium enrichment activities.

South Korea, the world’s fourth largest buyer of Iranian crude, has said it had no plan to provide state guarantee like Japan to continue its imports and the economy ministry has said it had already secured most of its replacement oil from Iraq, Kuwait, Qatar and the United Arab Emirates.

South Korea’s imports of Iranian crude oil fell nearly 40 percent in May from a year earlier, according to official data, reflecting Seoul’s efforts to reduce purchases in return for a waiver from U.S. sanctions that could have hit its companies.

The United States earlier this month extended exemptions from its sanctions on Iran’s oil trade to seven more countries including South Korea.

Asia’s top buyers of Iranian oil have cut imports by more than a quarter of a million barrels per day in the first five months of the year as they prepared for U.S. sanctions that take effect on Thursday and the curbs to be imposed by the EU.

Most of Iran’s exports flow to Asia and Tehran acknowledged for the first time on Wednesday that its oil exports had fallen sharply, down as much as 30 percent from normal volumes of 2.2 million barrels daily.

Both South Korea and Japan depend on the United States for their security but have no natural resources of their own, so they have scrambled to find other sources as they sought to reduce Iran imports.

China, which hasn’t received a waiver from U.S. restrictions, has cut Iran imports by 25 percent to 389,857 bpd so far this year, according to government data.

Writing by Zahra Hosseinian; Editing by Michael Roddy

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