South Korea’s July crude oil imports from Iran fall over 40 percent year-on-year

SEOUL (Reuters) – South Korea’s imports of Iranian crude dropped 43.5 percent in July from a year earlier, with buying fading amid looming U.S. sanctions against supply from the Middle Eastern nation.

South Korea shipped in 788,651 tonnes of crude oil from Iran last month, or 186,478 barrels per day (bpd), customs office data showed on Wednesday. That was down from around 1.4 million tonnes in the same month last year, but up from 686,849 tonnes this June.

South Korean refiners started cutting their Iranian crude purchases after the re-imposition of sanctions by the United States was announced in May.

Initial sanctions, including on Iranian access to the U.S. banking system, went into effect on Aug. 6, with sanctions blocking companies from buying Iranian crude starting in November.

South Korean refiners did not plan to load any Iranian crude in July amid pressure from their government and the United States and South Korea to comply with the sanctions, which should cut imports for August based on shipping times, sources said last month.

The South Korean government has been seeking waivers to the sanctions from the U.S. government.

In the first seven months of the year, South Korea’s Iranian crude imports declined to 6.92 million tonnes, or 239,317 bpd. That was down 35.1 percent from 10.67 million tonnes over the same period in 2017, according to the customs data.

In total, South Korea, the world’s fifth-largest crude oil importer, shipped in 12.89 million tonnes of crude in July, or 3.05 million bpd, up 3.6 percent from 12.44 million tonnes a year earlier.

Oil imports from Russia rose 60.1 percent to 1.18 million tonnes year-on-year. U.S. crude imports in July were 684,931 tonnes, compared to no shipments a year earlier.

To plug a supply gap from Iran, South Korean refiners were expected to import more crude oil from the United States in September and October, bringing in 6 million barrels of crude each month, according to sources with knowledge of the matter.

For the January to July period, South Korea imported 87 million tonnes of crude, up 2.8 percent from 84.61 million tonnes last year, the data showed.

The country’s final July crude oil imports data will be released later this month by state-run Korea National Oil Corp (KNOC).

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