UAE, Saudi Pledge More Oil To South Korea

The UAE and Saudi Arabia have promised to fill any gap in South Korea’s oil imports if supplies from Iran are disrupted, South Korean Minister of Strategy and Finance Bahk Jae-wan said on Monday.

“So far the UAE and Saudi Arabia have promised to provide more oil than now if things get worse. They have promised to fill the gap,” he told reporters on the sidelines of a bilateral economic meeting with UAE officials in Abu Dhabi. He said no oil volumes had been specified so far.

The US and Europe are trying to squeeze the revenues Iran makes from oil exports to force it to halt a nuclear programme they fear will be used to make weapons but which Tehran says is for power generation.

“It has not yet been decided on cutting oil imports but some companies have already started to reduce imports from Iran,” said Bahk.

Gulf OPEC-members with the lion’s share of spare capacity have been increasing their production to meet the extra demand.

Saudi Arabia pumped around 10 million barrels per day (bpd) in April, and has a total capacity of 12.5 million bpd, while the UAE has been producing at its full capacity of around 2.7 million bpd in April.

Last week, Bahk said South Korea would eventually have to agree to reduce crude oil imports from Tehran, in line with Western sanctions against Iran.

Sources have said South Korea will make sharp cuts in imports of Iranian crude from June, joining a growing list of customers including China, Japan and India which have cut purchases this year as sanctions make it impossible to pay, ship and insure the oil.