Thursday, August 4, 2011

South Korean Oil Payment Problems – Another India

Reuters reported on Wednesday that Iran is facing oil payment problems with South Korea similar to problems it faces with India. The report claims that South Korea has been unable to use international banking system to transfer $3.82 billion to Iran for the crude oil it has purchased this year. Iran has a similar problem with India where some $5-7 billion of its cash is trapped due to the inability of Indian banks to transfer the funds to Iran.

The South Korean authorities have allowed Iran to open an account in the local currency won. The refiners who purchase Iranian crude have been transferring funds to this won account. Iran can use the funds to purchase South Korean goods, but Iran has a large trade surplus with the country and most of the cash would still be trapped inside South Korea if Iran continues selling oil to the country.

South Korea imports some 230,000 barrels of Iranian crude per day.


Anonymous said...

Time to trade for new SK tanker vessels and 2nd hand jetliners.

Anonymous said...

Anon 3:50PM...Sorrow they wont allow it due to sanctions besides what is the point of buying aircraft when you can not refuel abroad or ships when ports will be closed against us.

Anonymous said...

No matter which way you look at it this regime is screwed they know this. That is why they have put a IRGC man in charge of NIOC that is a red card for problems also even if price of oil goes to $200 PB it wont make a difference because regime has problems with international banking transactions.So option 1..Keep on pumping oil as if nothing happened..option 2 pump oil and barter...option 3 lay off oil workers because of excess oil in local ports.Every option has its own problems.

Anonymous said...

option 4) stop pumping oil and see if anyone gets upset enough to defy the sanctions and pay you hard currency to restart selling.

Anonymous said...

I somehow fail to see how this is Iran's problem..Can someone please enlighten me?

South Korea owes Iran X amount of money and somehow it's Iran's fault that South Korea cannot pay? Shouldn't the unos be on the Koreans on finding ways of making payment?

Unless the Korean don't intend on making that payment which is different ball game altogether.

Take this case to court any day and the South Koreans will lose. You owe, you pay - simple. Meanwhile gas prices are going up in Korea.

Journalists have a way of spinning news these days. The report have no source and even if they did, I bet it'll be one of those "anonymous sources who don't want to be named". The story begins with "Reuters reported".To me that says it all.

The countries that put sanctions on Iran have been writing a lot of "feel good" stories about their latest sanctions and how it's hurting Iran. Kinda like a "lets pat ourselves on the back for a good job done" article.

Maybe Reuters will also be interested in this:

Anonymous said...

The end of subsidies is could for the economy...not so good for the very large number of people living below the poverty line.

The problem with the oil sales is not that South Korea can't pay, The problem, which most definitely is Iran's, os that the international banking system is closed to Iran.
The Koreans can only pay in their own currency, rather than in dollars and the Iranians can't buy anything with Korean currency except stuff from South Korea.
As their already buying as much South Korean stuff as they want to buy, the rest of the Korean payments simply sit in a bank account in Korea.

Anonymous said...

The regime dug their own grave now they can lie in it good riddance!

Anonymous said...

Just stop pumping oil out. Do not ship any oil till the oil price reaches 300 dollars and then those who made these stupid sanction have to break them. These sanctions are not affecting the Iranian government. It is affecting the people. Iranians know well than America does not care about them. This is another American policy that is going to backfire on America again.