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S. Korean refiners diversify imports of condensate over U.S. sanctions on Iran

All News 14:28 August 08, 2018

By Kim Kwang-tae

SEOUL, Aug. 8 (Yonhap) -- South Korean refiners and a petrochemical company have begun to increase purchases of ultralight crude from Qatar, the United States and other countries as they cut imports of Iranian condensate due to Washington's sanctions on Tehran, corporate sources said Wednesday.

SK Innovation Co., South Korea's biggest oil refiner by sales, said it has been steadily slashing imports of Iranian crude oil and that no Iranian condensate has arrived since July as it has diversified its sources of crude oil imports.

"Our reliance on Iranian condensate has been reduced as we buy condensate from Northern Europe and West Africa, including Qatar and Norway," an SK Innovation official said. He declined to elaborate and asked not to be identified, citing policy.

Middle East countries accounted for 75 percent of SK Innovation's total crude oil imports in the second quarter, followed by 14 percent from the U.S., Central and South America and Europe.

SK Innovation imported 8 million barrels of crude oil from the U.S. in the January-June period, making it the largest South Korean buyer of U.S. crude oil over the cited period.

This file photo provided by SK Innovation Co. shows its corporate logo. (Yonhap)

The move came as Washington has imposed the most biting sanctions ever on Iran. On Twitter, U.S. President Donald Trump has warned that "anyone doing business with Iran will NOT be doing business with the United States."

The U.S. has pressed South Korea and some other countries to halt their oil imports from Iran or face so-called secondary sanctions following the May announcement of its exit from the 2015 nuclear agreement with Iran. The 180-day grace period is set to end on Nov. 4.

South Korean refiner Hyundai Oilbank Co. has diversified its sources of condensate to Norway, Qatar, Nigeria and the U.S. as it loaded no Iranian condensate in July, a Hyundai Oilbank official said.

Hyundai Oilbank said its daily capacity is 130,000 barrels of condensate.

Hanwha Total Petrochemical Co., a petrochemical company, said it has increased imports of condensate from Qatar and Australia as part of its diversification strategy.

Iranian condensate had accounted for more than half of Hanwha's total imports of ultralight crude last year, but the company began to reduce its imports of Iranian condensate beginning in the first half.

Hanwha said no Iranian condensate was loaded for shipment in July.

"We are unlikely to import Iranian condensate in the future unless an import quota is granted before November," a Hanwha official handling the issue said.


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