SEOUL, March 23 (AJP) - A temporary U.S. decision to allow the sale of Iranian oil already at sea is expected to ease near-term supply pressures, but offers limited relief for South Korea’s petrochemical sector struggling with naphtha naphtha shortages from Strait of Hormuz disruption.
The U.S. Treasury Department has authorized a 30-day waiver covering Iranian crude loaded before March 20, a move aimed at injecting additional supply into global markets and stabilizing prices.
Treasury Secretary Scott Bessent on Sunday defended the decision, arguing that it would not materially strengthen Tehran while benefiting U.S. allies.
“Iran already gets a huge amount of the money, because Iran is the largest sponsor of state terrorism, and China has been funding them,” Bessent said. “This sale…would help the United States’ Asian allies, like Japan, Korea, Indonesia and Malaysia.”
For South Korea, the additional supply—estimated at around 140 million barrels globally—could help ease price volatility and improve access to crude suited for domestic refineries.
Iranian crude, typically medium-sour, aligns well with Korea’s refining system, allowing efficient processing without major adjustments. The government has yet to issue an official response.
The measure is unlikely to significantly ease pressure on Korea’s petrochemical industry, which depends heavily on condensate, a key feedstock for naphtha production.
Before U.S.-led sanctions, Iran was a critical supplier. According to the Korea Petroleum Association, Iranian crude accounted for 14 percent of Korea’s total imports in March 2018 before dropping sharply as sanctions tightened.
More importantly, Iran supplied about half of Korea’s condensate imports in 2017.
Iranian condensate is prized for its high naphtha yield—the base material for petrochemical products—and is typically sold at a discount compared with alternatives, making it both efficient and cost-competitive.
The current waiver does not restore direct imports from Iran, nor does it signal a broader shift in sanctions policy. It is restricted to stranded oil—much of it already purchased, often by China—to re-enter the market.
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