Suspension will continue from July onward throughout European Union coverage ban on tankers.
South Korea has announced its latest insurance news, stating that it will be suspending its imports of crude beginning in July 2012, following a ban on coverage of the vessels that transport it, by the European Union.
The announcement was made in press release by the South Korean Ministry of Knowledge Economy.
In it, it claimed that it has ceased its Iranian oil imports as the EU works to cut off any type of insurance for importing crude from that country, while it simultaneously suspends its own inbound shipments beginning at the start of July.
At the moment, all of the oil tankers transporting oil from Iran to South Korea are covered by indemnity and comprehensive protection by European firms. This makes up about 87 million yearly barrels of Iranian oil, which make up about one tenth of all of the oil that it imports.
That said, it is expected that any impact that this change will have on the economy of the country will be quite negligible, as the South Korean government has already made replacement efforts for a “significant amount, though not all” of the oil that it would otherwise have brought in from Iran, increasing the number of shipments that it brings in from the United Arab Emirates, Kuwait, Iraq, and Qatar.
This announcement makes South Korea the first major economy in Asia to follow the EU and American request to decrease global Iranian crude imports in the effort to put pressure on the Middle Eastern nation to abandon its controversial program involving nuclear technology.
Knowledge Economy Ministry head of the resources development office, Moon Jae-do, also added that it remained important for the country’s capital, Seoul, to keep up its trade relations with Iran, despite the fact that it would not be importing oil. This is because the exports from South Korea to Iran – which is the Middle East’s third biggest marketplace – rose to $6.07 billion last year, which was an increase of 32 percent.
Other leading Asian countries importing oil from Iran, such as India and China, have requested that Tehran arrange its own insurance and shipping so that their crude supply can continue uninterrupted.