South Korea plans to boost imports of Iranian oil, in particular condensate, which is a super light oil that can be processed into fuels and petrochemicals, to meet country’s growing demand, Reuters reported.
Iranian Oil Minister, Bijan Zanganeh, stated that Iran is exporting 100,000b/d of oil to South Korea, one of its main crude customers, and hopes to double that figure by the end of 2016. The volumes of South Korea’s oil imports from Iran tripled in January, however, shipments remain far below original levels before recently lifted economic sanctions were imposed on Tehran.
South Korea’s Trade Ministry said the two countries would establish a payment method that would facilitate the trade process of crude as well as condensate between National Iranian Oil Company and South Korea’s SK Energy and Hyundai Oilbank.
South Korea’s condensate demand is expected to grow this year as Hyundai Oilbank will start operations at a new splitter. South Korea also expects to sign a memorandum of understanding with Iran to lease out its oil storage, the ministry added.
South Korea was previously reported to have decreased its reliance on Middle Eastern crudes in 2015 as refiners turned to Russian and Mexican cargoes that were plentiful, while anticipating rise in purchases from Iran in 2016, as Platts informed in mid February.