South Korea will suspend oil imports from Iran from next month following a European Union (EU) insurance ban on Iranian vessels carrying the fuel.
South Korean Ministry of Knowledge Economy said in a press release on Tuesday that "the country, too, has to suspend oil imports from Iran as the European Union is set to stop offering any type of insurance on Iranian oil imports while also suspending oil imports from Iran itself from July 1."
Currently, European firms cover comprehensive protection and indemnity insurance on all Iranian oil shipments to South Korea, which purchased about 87 million barrels of oil constituting one tenth of all its oil imports, from Iran last year.
Despite this, the effect on the country's economy will be minimal as the government has already replaced a "significant amount, though not all" of its oil imports from Iran, with increased shipments from four other Arab oil exporting nations -- Iraq, Kuwait, Qatar and the United Arab Emirates, according to the Ministry.
South Korea is the first major Asian economy to comply with EU and U.S. call to reduce the imports of Iranian oil, a tactic by the West to pressure Iran to give up its controversial nuclear program.
However, Moon Jae-do, head of the Knowledge Economy Ministry's resources development office, told reporters that it was important for Seoul to maintain trade relations with Iran.
South Korea's exports to Iran, its third-largest market in the Middle East, increased 32 percent to $6.07 billion last year.
Reuters reported that China and India, major Asian importers of Iranian oil, have asked Tehran to arrange shipping and insurance to ensure uninterrupted supply of oil.
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