South Korea's Iran Oil Imports Continue to Slip

SEOUL—South Korea continued to decrease its imports of Iranian crude oil last year, reducing shipments by more than a third as part of efforts to extend an exemption from U.S. sanctions targeting Tehran.

South Korea has agreed to steadily reduce Iranian oil imports in exchange for the U.S. exemption from a blanket ban on imports as it seeks replacement barrels for supplies from the Islamic Republic, which it previously sourced around a 10th of its crude from.

The U.S. granted the resource-poor Asian country a 180-day exemption from sanctions in December, extending an initial exemption for the same period that started in June.

Imports from Iran totaled 5.724 million barrels in December, taking the full-year total to 56.146 million barrels, a 35.6% fall compared with 2011, data from state-run Korea National Oil Corp. showed Tuesday.

South Korea's reliance on Iran for its crude needs fell to 5.9% last year from 9.4% in 2011.

Negotiations to determine the acceptable extent of continued cuts ahead of the next exemption extension will likely begin in May, an official with the Ministry of Knowledge Economy, who declined to be named, said by telephone.

South Korea is one of nine countries, including China, India and Turkey, that have been exempted from fully complying with U.S. sanctions targeting Iran's oil exports, as the U.S. attempts to maintain international pressure on Tehran's finances.

Other Middle Eastern countries have offset declining shipments from Iran, with Saudi Arabia, Kuwait and Qatar accounting for 32.0%, 14.5% and 11.0% of South Korea's crude imports, up from 31.4%, 12.7% and 10.0% in 2011, the data showed. South Arabia remained its top source, supplying 303.049 million barrels last year.

European crude has also helped to offset reduced Iranian barrels, increasing to 4.6% of South Korean imports last year compared with 0.6% in 2011. The data didn't provide a breakdown of figures for European countries.