The release of Iran’s frozen assets in South Korean banks is not expected to lead to a resumption of Iranian oil trade at this time, according to government officials and industry sources in Seoul and Tehran. The Korean Economic Daily reported that discussions were taking place between Seoul and Washington to release $7 billion worth of Iranian funds held in Woori Bank and the Industrial Bank of Korea. However, officials have stated that there are conditions attached to the release, including the release of US hostages held in Iran and limitations on Iran’s nuclear development process.
Iran’s oil minister, Jawad Owji, announced that the funds, which were payments for Iranian condensate sold to South Korea in the late 2010s, have been released by the South Korean government. However, the South Korean Finance Ministry declined to comment on the fund transfer and related procedures. A banking sector source in Seoul revealed that there was an order to release the funds, but the status of the transfer is still unconfirmed.
While the release of the funds is seen as a positive development, the resumption of Iranian oil trade remains uncertain. Analysts and industry participants in South Korea stress that it would require a significant shift in the diplomatic stance between Washington and Tehran for Iranian oil to freely trade in international markets once again. Despite the release of the funds, there are still obstacles to overcome before the resumption of Iranian crude imports can be allowed.
South Korea has a history of being a major customer of Iranian crude oil and a significant importer of Iranian condensate. However, due to ongoing international sanctions, South Korean refiners have halted purchasing Iranian crude. Nevertheless, South Korean refiners and petrochemical companies express a strong interest in Iranian oil, particularly South Pars condensate, which typically trades at a discount compared to other varieties of crude.
