Sanctions on Iranian Crude Lifted? Industry: "High Uncertainty, Not for Now"
Input 2026.06.20 04:30 | Page 4 | Oh Ji-hye reporter
Will Iranian Oil Be Imported After US Sanctions Relief? Industry Says 'High Uncertainty, Not Yet'
Image caption: Residents swim near the Strait of Hormuz off Bandar Abbas, Iran, on the 17th, while cargo ships and merchant vessels are anchored nearby. Bandar Abbas=AP via Yonhap News
The US has decided to lift sanctions on Iranian crude oil and petroleum products, raising interest in whether domestic imports could resume. Iranian crude is a medium-sour crude similar to other Middle Eastern crudes that local refiners have imported before, and they have experience refining it, so there are no technical issues. However, other sanctions, insurance, and payment problems have not yet been resolved, so immediate imports are expected to be difficult. The industry is watching the situation closely.
Iranian Oil Could Be Used If Imported, But Many Knots Remain
Image caption: Gas stations in Seoul show fuel prices on the 19th. News1
According to the Korea International Trade Association's export statistics system on the 19th, South Korea has a history of importing Iranian crude until 2019. Imports were completely halted after 2020 due to international sanctions, but the industry has experience and Iranian crude is the preferred medium-sour crude, so if it is brought in, it can be used. That is the general view of the refining industry.
The problem is that the import process is not smooth. According to the Korea Petroleum Association, not only the US but also the European Union (EU) and the United Nations have imposed various sanctions on Iran for reasons including nuclear development and human rights abuses. In particular, many tankers use insurance from European companies, so importing Iranian crude could create insurance restrictions. If the US actively engages, the international community may join in lifting sanctions, but the US-Iran negotiations continue to face unexpected developments, making it difficult to predict.
Even if sanctions are completely lifted, it has been a long time since Iran was removed from the international payment system, so it will take time to restore it. An industry official said, "The situation in the Strait of Hormuz is also uncertain, so it is not yet a stage where we can positively consider importing Iranian crude. There are also existing buyers, so we don't know if there will be any volume for us to take."
Possibility of Oil Price Drop If Iranian Oil Enters Market... Variable of Toll Imposition
Image caption: HMM's very large crude carrier (VLCC) 'Universal Winner' arrives off the coast of Ulsan on the 10th to unload crude oil and approaches the buoy, an offshore oil unloading facility. Ulsan=Yonhap News
Even if direct imports are not possible, there is an expectation that if Iranian crude enters the global market, there could be a knock-on effect such as lower Middle Eastern crude prices. Iran has been selling crude to China at very low prices to avoid sanctions, but if export routes open, it can sell to other countries at proper prices. This means a strong competitor for Middle Eastern oil producers. Yoo Seung-hoon, a professor at the Department of Future Energy Convergence at Seoul National University of Science and Technology, said, "Iran needs funds for war recovery, so it is likely to sell crude relatively cheaply, which could lower market prices."
However, the variable of imposing tolls on the Strait of Hormuz remains. Iran has announced that it will open the strait for free for 60 days and then charge a toll. The Strait of Hormuz is used not only by Iran but also by Saudi Arabia, Kuwait, and other countries to transport crude, so the cost of importing Middle Eastern crude could rise. This could affect both international and domestic oil prices. Kim Tae-hwan, head of the Petroleum Policy Research Division at the Korea Energy Economics Institute, said, "If the import unit cost of Middle Eastern crude rises by the amount of the toll, it could be passed on to domestic product prices, and the industry will weigh (costs and profits) between non-Middle Eastern and Middle Eastern crude. But it is unclear whether toll imposition is possible under international law that guarantees free passage of merchant ships, and the details of US-Iran negotiations are unknown, so we have to wait and see."
- Oh Ji-hye reporter | 5g@hankookilbo.com
