Iran has finalized a deal with South Korea to trade oil for goods as part of a larger strategy to bypass US sanctions re-imposed on the country following Washington’s unilateral withdrawal from the 2105 Iranian nuclear deal.
Head of Iran-South Korea chamber of commerce said the deal was made for returning oil export revenues from South Korea.
“By the new mechanism, Iran’s oil export revenue will be bartered with imported goods,” Hossein Tanhayi said.
According to Tanhayi, to the end, the two sides can open a joint fund between their central banks. He didn’t elaborate further on the mechanism.
Seoul has fully complied with the US sanctions in the past few months, and totally stopped its oil imports from Iran in September for the first time in six years. The country made the decision before US sanctions against Iran take effect in November 4.
South Korean buyers, which are among major Asian buyers of Iran’s crude oil, suspended Iranian oil loading from July due to the uncertainty of getting a waiver from the US government.
South Korea relies on Iran for 13 percent of its imported oil, making Tehran its third crude supplier following Saudi Arabia and Kuwait. In 2017, the South purchased 147 million barrels of Iranian oil.
US President Donald Trump in May pulled his country out of the 2015 Iran nuclear deal and announced he would re-impose the anti-Tehran sanctions, which it had lifted under the agreement, in two phases.
The first round of sanctions, which mainly targets Iran’s financial, automotive, aviation and metals sectors, was re-imposed in early August. The second round, which will hit the Iranian oil industry and banking relations, is slated for November 4.