South Korea is one of Iran’s biggest Asian customers which won a six-month waiver in November from US sanctions but it resumed imports of Iranian oil in January after a four-month gap.
Last month, Korean refiners imported $476 million worth of crude from Iran, more than four times the volumes posted in January, data from the Korea Customs Service showed on Tuesday, Presstv Reported.
South Korean companies imported $101.2 million in Iranian crude in January, less than one-fifth of $539 million worth of Iran purchases which the world’s fifth-largest crude importer averaged monthly in the first seven months of 2018.
Among Korean refiners, Hanwha Total Petrochemical Company has already bought 12 million barrels of Iranian oil for delivery in February to April.
Condensate accounts for nearly 70 percent of South Korean imports of Iranian crude, according to Yonhap. Iranian condensate took up 51 percent of Seoul's total condensate imports during the first quarter of last year, it said.
Condensate is an ultra light oil which is mainly used as a raw material to make petrochemicals like plastics. Asian customers favor Iran's South Pars condensate for its rich naphtha yield, a stable supply and price competitiveness.
Before the sanctions, South Korea was the biggest client of Iranian condensate with 300,000 barrels per day (bpd) on top of 100,000 bpd of crude oil.
The US waiver allows South Korea to purchase 200,000 bpd of condensate for use in several refiners which are designed to process the Iranian grade.
SK Incheon Petrochem, Hyundai Chemical, Hanwha Total Petrochemicals and Lotto Chemical are regular buyers of Iranian condensate.
South Korea and other importers of Iranian oil are holding their breath as the waiver expiry in May nears.
Oil prices surged to four-month highs of $67.54 for Brent on Monday, with an increasingly tightened market due to loss of production in Venezuela already weighing heavily on crude futures.
OPEC: Impossible to zero out Iran oil imports
The US has reiterated that its goal is to reduce Iran’s exports to zero but OPEC Secretary General Mohammed Barkindo said on Tuesday it is “practically impossible”.
"We keep hearing that the objective is to bring down Iranian exports to zero but practitioners in this industry know very well that it is practically impossible to bring down the exports of Iran to zero,” he said in Baku.
Barkindo said questions about whether the US will extent the waivers "continue to be one of these growing uncertainties in the market because of the importance and size of Iran in the supply demand balance."
Iran's Minister of Petroleum Bijan Zangeneh said on Saturday that the Trump administration was behind the current market tensions.
"They have caused tensions in the oil market for over a year now, and they are responsible for it, and if this trend continues, the market will be more tense," he said.
Zangeneh also said, "We do not know whether US waivers would be extended or not. We will do our job but they say something new every single day."
On Sunday, the minister said there has been a steady rise in crude production in Iran's West Karun fields near the Iraqi border.
Iranian officials have said developing joint fields is a top priority, but US sanctions have prevented major energy companies from making new investments in them.
Oil development plans on track
According to Zangeneh, oil production from West Karun oil fields has quintupled over six years.
"The amount of oil production from West Karun fields in 2013 was 70,000 barrels per day (bpd). This amount has reached 355,000 barrels in the year 1397," he said, referring to the current Iranian year that ends Thursday.
The West Karun bloc includes Yadavaran, Yaran and Azadegan fields which hit 305,000 bpd of production in 2018, up from 120,000 bpd in 2017.
State-run Chinese energy giant Sinopec has offered Iran a $3-billion deal on further development of Yadavaran the two countries are already working on, the Wall Street Journal reported in January.
Iran's plans to build a new oil export terminal are also on track. Zangeneh said the terminal at Jask on the Gulf of Oman will become operational by 2021.
"We hope that this terminal will become operational by end of the year 1399 and for the first time Iran's oil will be exported through Makran" on the Gulf of Oman, he said.