South Korea snubs U.S. over Iran sanctions

January 17, 2012 - 17:42
South Korea warned the United States on Tuesday it would have difficulty replacing Iranian crude supplies and expressed concern that sanctions pressure could lead to higher oil prices, Reuters reported. 

Washington wants Asia to cut crude imports from the OPEC member in a bid to pressure Tehran. 

South Korea, which depends on the United States for its security, is the world's fifth-largest oil importer. Around 10 percent of its crude oil came from Iran in the first 11 months of 2011. 

“It would be tough to switch the source of crude quickly,” foreign ministry spokesman Cho Byung-jae told reporters. 

Asian government officials are worried that a scramble to secure alternative supplies by the region, which includes Iran's biggest crude buyers China, India and Japan, would drive up oil prices. 

Kim Jae-shin, deputy minister of foreign affairs and trade, underscored that point with U.S. officials, a news pool report said. 

“Many in South Korea are quite worried that further strengthening sanctions in Iran at this time will destabilize international markets of crude oil and bring about adverse effects on the economy,” the report quoted him as telling the officials. 

A team led by the U.S. State Department's special adviser for nonproliferation and arms control, Robert Einhorn, and the Treasury Department's assistant secretary for terrorist financing, Daniel Glaser, started a three-day visit to Seoul on Monday. They will head to Japan afterwards. 

“We're urging all of our partners to help us to work with us in putting pressure on the government of Iran to get it to negotiate seriously. Particularly, we're urging them to reduce their purchases of crude oil from Iran,” Einhorn told a meeting with government officials, the news pool report said. 

South Korea has some $5 billion in money owed to Iran's central bank for crude oil imports trapped in its banking system because of the difficulty of sending money to Iran without falling foul of U.S. sanctions. 

“We're urging them to unwind their financial deals with the central bank of Iran,” Einhorn said.