Korea is considering accepting Iran’s proposal to supply oil to Seoul using its own oil tankers, a government source said Monday, after oil imports from Tehran were halted due to the European Union’s ban on insuring Iranian oil shipments.

Iran has proposed that South Korean oil refiners use Tehran’s own oil tankers, a move that would allow them to receive crude shipments without concerns over insurance guarantees, the source said on the condition of anonymity.

“Korean oil refiners and the Iranian side have been in consultations over the matter of using Iranian-flagged oil tankers to resume oil shipments,” the source said.

Using Iranian-flagged ships to import Iranian oil “is not internationally prohibited,” the source said.

If the consultations go well, South Korean oil refiners could resume oil imports from late this month or early next month, the source said.

The insurance embargo, which came into force on Sunday, is part of the EU’s broader sanctions against Iran for its nuclear programs. South Korea has long prepared for the anticipated European sanctions by arranging alternative suppliers.

Seoul bought about 87 million barrels, or 9.4 percent, of its total oil demand from Tehran last year. In the first five months of this year, Iranian crude imports dropped 16 percent to 29.2 million barrels, according to government data.

Although Japan, one of the major importers of Iranian oil along with South Korea, passed a law to offer government guarantees on insurance for Iranian crude shipments, Seoul has not been considering such a measure, officials said.

South Korea secured a waiver from new U.S. financial sanctions against Iran on June 12 after significantly cutting its imports of Iranian crude oil this year.

Last week, the Iranian ambassador to South Korea, Ahmad Masumifar, warned that Tehran could halt all imports of goods from South Korea in response to Seoul’s suspension of Iranian oil imports.

Tehran “may decide to fully stop importing Korean goods,” the ambassador told Yonhap News Agency in an interview. 

(Yonhap News)