S. Korea firms in talks to resume Iran oil imports

SEOUL (AFP) — South Korean oil refiners are in talks with Iran to resume oil imports, officials said Thursday, potentially by using Iranian tankers as a way to circumvent European Union sanctions.

Talks are currently underway with Tehran, officials of Hyundai Oilbank, SK Energy and Seoul's knowledge economy ministry said.

Imports stopped entirely in July when an EU oil embargo on Iran over its nuclear programme took effect, banning European firms from insuring Iranian oil shipments.

South Korea had relied entirely on European firms for such coverage but a Hyundai Oilbank spokeswoman told AFP: "We are still hammering out details before finalising the deal... in a way to let Iran to take responsibility for oil tanker insurance."

A spokesman for SK Energy, the other South Korean refiner which previously bought Iranian oil, confirmed the ongoing talks but refused to elaborate.

The South bought 9.4 percent of its crude oil from Iran last year. It had been sharply reducing purchases this year in return for a waiver from separate US sanctions on Tehran.

An official of the knowledge economy ministry also said Seoul refiners were discussing with Tehran ways to resume imports, including letting the Middle Eastern nation provide tankers or cover insurance for shipments.

"No firm date has been set when exactly it (oil imports) will resume though... companies need time to hammer out details of contracts," he told AFP on condition of anonymity.

South Korea is a close ally of the United States, which stations 28,500 troops in the country to deter any North Korean attack.

But Iran is the South's third-largest trade market in the Middle East. Tehran warned in June it would reconsider ties with Seoul if it stopped importing oil from Iran.