South Korea might ban Iranian petrochemical product imports following pressure from the US to beef up sanctions against Tehran over its nuclear program, sources said, although the measure would have a limited economic impact.
However, the fifth-largest crude importer in the world isn’t planning a ban on crude imports from the OPEC member, the sources at South Korea’s economy ministry said.
Seoul is considering the sanctions following a two-day visit by US Undersecretary of State for Political Affairs Wendy Sherman, who discussed Iran.
The US, Britain and Canada announced on Monday new sanctions against Iran in response to a report by the International Atomic Energy Agency suggesting Iran had worked on designing an atomic bomb.
The EU agreed in principle on Tuesday to sanction about 200 Iranian people, companies and organizations and France mooted the idea of a Europe-wide ban on Iranian crude imports.
“We are cautiously considering an import ban on Iranian petrochemical products, and currently evaluating the possible impact of a ban,” one source said.
Petrochemicals that could be affected include butadiene, paraxylene and other intermediates produced by processing naphtha, another source said.
The sources declined to be identified as they were not authorized to speak to the media.
South Korea imported US$350 million in Iranian petrochemicals last year, while exporting US$450 million of its petrochemicals to Iran. That would represent a small part of South Korea’s global trade in petrochemicals, which last year totaled US$49 billion.
“There is going to be a very miniscule economic impact for the two nations if Korea issues a petrochemical sanction,” said Jang Ji-hyang, director of Middle East and North African studies, at the Seoul-based Asan Institute for Policy Studies.
Sherman visited South Korea on Monday and Tuesday, South Korea’s foreign affairs ministry said. She discussed Iran nuclear issues during the trip. She was in Japan first and visited China after her stop over in Seoul.
Sherman’s visit may have been aimed at building pressure on top consumers in the region to reduce their dealings with Iran.
Asian countries may be willing to go along with US demands to a certain extent, but energy security will always come first.
“Countries would not want to antagonize the US, and if the US puts pressure on them they might reduce imports slightly, but nothing that would jeopardize energy security,” said Hooman Peimani, head of energy security and geopolitics at the Energy Studies Institute in Singapore.
“South Korea, and to a lesser extent Japan, is in a unique situation because of North Korea and their dependence on the US for security purposes,” Peimani said.