SEOUL (Reuters) - South Korea's Samsung Total Petrochemicals Co has revived a contract to buy Iranian oil after a year's hiatus, as thin margins in plastics make the cheap fuel from Iran hard to resist, people familiar with the deal said on Friday.
The deal is a rare example of a buyer returning to the market for Iranian oil despite the obstacles arising from sanctions and efforts by Western powers to stem the flow.
After jarring interruptions in exports from Iran last year that included a halt in shipments to top consumers Japan and South Korea, importers have found ways to keep oil flowing without violating sanctions.
The allure of cheap oil and improved margins has made it worthwhile for the South Korean joint venture between two big international firms to find ways around difficulties.
The deal may save Samsung Total as much as $6.7 million in costs, according to Reuters calculations.
"The deal can be easily understood if you look at Samsung Total's financial situation," according to a government source in Seoul with direct knowledge of the matter.
The company is a joint venture between South Korea's Samsung Group and French energy giant Total.
Spokespeople at Total, Samsung Total and the Samsung Group declined to comment.
Replacing the Iranian oil forced up Samsung Total's input costs, contributing to a fall in operating profits, sources said. Those profits fell 90 percent in the second-quarter of 2012, according to the company's regulatory filings. The company switched to more expensive Australian and Russian condensate last year, sources said.
Samsung Total had an annual contract to buy about 550,000 barrels a month of Kangan condensate until June last year, although it is unclear if it actually imported the full volume during the first half of 2012. The volume of the new contract is unclear.
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