Iran oil insurance offered by Tehran to South Korea

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Officials in the Middle Eastern nation are working to get around the EU bans.

Iran oil insurance for tankers carrying crude from the country’s ports has been offered to South Korea, for accident coverage with a maximum of $1 billion.

Iranian officials have made this effort to help skirt the coverage bans from the European Union.

South Korea, through Hyundai Oilbank and SK Innovation, are currently considering this offer, say officials from both of those countries. These two businesses also have complete ownership over the other refiner in the country, SK Energy.

South Korea has lacked Iran oil insurance since the start of July and has therefore ceased imports.

The European Union’s sanctions against Iran oil insurance on tankers shipping from the country went into effect on July 1, stopping the ability of the majority of crude importers from finding coverage. Though India and China have continued their own imports, though to a reduced degree, South Korea – another of the top Asian customers of Iranian crude – was unable to find a coverage alternative that would allow the shipments to continue.

The Iran oil insurance sanctions from the E.U. are an effort being made to pressure the Middle Eastern country to cease its disputed nuclear program. However, as effective as it has been, so far, in reducing Iranian crude exports to nations around the world, the refiners in South Korea are now thinking about using the National Iranian Tanker Co. (NITC) ships to restart their imports.

The decision is far from final. Hyundai Oilbank officials have said that the details of an agreement are still in negotiations on virtually every level. This includes everything from the offer for Iran oil insurance to the number of shipments every month. It isn’t yet known whether the agreement will have been finalized by the end of July.

Hyundai Oilbank will not be able to make any decisions regarding the Iran oil insurance or other shipment offers until it receives approval from the government. The South Korean government must first deem the proposal from Tehran to be “acceptable”, and give the official nod before any final decisions can be made.

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