Iran may boycott Korean products

By Kim Sejeong

If Korea complies with the European Union sanctions, Iran will consider halting all South Korean imports in response, Iran's ambassador warned Wednesday.

In an interview with Yonhap News Agency, Ambassador Ahmad Masumifar said Tehran "may decide to fully stop importing Korean goods" in protest against Seoul's decision. The decision will also be seen as "serious obstacles" to bilateral business, he added.

The envoy's comment came two days after the European Union announced that it would proceed with economic sanctions against Iran as planned starting from July 1.

The EU's decision was a result of failed negotiations between Iran and P5+1 group ― the United States, France, Britain, Russia, China and Germany ― in Moscow early last week. The two parties met three times in three months, but all failed.

Korea's oil imports are likely to be stopped, as the sanctions ban EU insurers from selling "third-party liability and environmental liability insurance for the transport of Iranian oil". Almost all Korean companies that ship Iranian oil to Korea are known to have EU insurance.

Masumifar said other Asian countries have managed to continue to purchase Iranian crude oil, referring to Japan, whose parliament last week authorized the government to provide $7.6 billion state insurance to oil shipping companies. That is not a viable option for Korea because of the price.

Last year Korea purchased 87 million barrels of oil from Iran, accounting for 9.4 percent of its oil imports. In trade, Iran is Korea's third-largest trade partner in the Middle East. In 2011, Korea's exports to Iran were estimated at $6.07 billion, a 32-percent increase from the previous year.

No immediate comment from the government was available, but the Ministry of Knowledge Economy in charge of oil supply is believed to be busy seeking alternative oil suppliers.

Moon Jae-do, the head of the ministry's resource development office, said Monday that the ministry was in active and continuous dialogue with other oil exporters, including Iraq, Kuwait, Qatar and the United Arab Emirates, to find a replacement supplier.