South Korean Delegation in Iran After Oil Tanker Seized

A South Korean delegation arrived in Iran on Thursday amid tensions following the seizure of a South Korean oil tanker and its crew by Iranian forces in sensitive Persian Gulf waters this week.

Iran's Revolutionary Guards said Monday it had seized the South Korean-flagged Hankuk Chemi for infringing maritime environmental laws.

The Guards said the vessel was carrying 7,200 tonnes of "oil chemical products" and that the detained crew were from South Korea, Indonesia, Vietnam and Myanmar.

The South Korean delegation, led by the director-general of the foreign ministry's Middle Eastern affairs department, boarded a plane early Thursday and was set to arrive in Tehran via Doha.

"I plan to meet my counterpart at the Iranian foreign ministry and will meet others through various routes if it will help efforts to resolve the issue of the ship's seizure," said Koh Kyung-sok, the chief delegate, before boarding the plane.

But the government spokesman in Tehran gave a different version of the reason for the visit.

In a statement late Thursday Said Khatibzadeh said it was an advance delegation ahead of a visit Sunday by South Korean deputy foreign minister Choi Jong-Kun.

The visit by the South Korean delegation "had been agreed before the seizure" of the Hankuk Chemi oil tanker, "and its main goal is to discuss ways of accessing Iranian funds in Korea", Khatibzadeh said.

Iran's seizure of the tanker came after Tehran had urged Seoul to release billions of dollars of Iranian assets frozen in South Korea under US sanctions. Iran was a key oil supplier to resource-poor South Korea until Washington's rules blocked the purchases.

Seoul has said that South Korea's deputy foreign minister would discuss the frozen assets during his three-day visit to Iran, and the trip would go ahead despite the seizure.

According to Iranian government spokesman Ali Rabiei, Iran has "$7 billion of deposits in South Korea".

The money can neither be transferred nor earn interest, yet Iran is charged fees on it, he has said.

The Hankuk Chemi incident was the first seizure of a major vessel by the Iranian navy in more than a year

In July 2019, the Guards seized the British-flagged oil tanker Stena Impero in the sensitive Strait of Hormuz for allegedly ramming a fishing boat. They released it two months later.

At the time it was widely seen as a tit-for-tat move after authorities in the British overseas territory of Gibraltar detained an Iranian tanker and later released it over US objections.

Tehran denied the two cases were related.

The Guards seized at least six other ships in 2019 over alleged fuel smuggling.

Photo: IRNA

Iran Steps Up Nuclear Programme, Holds South Korean Tanker

By Amir Havasi

Iran said Tuesday it had stepped up its uranium enrichment at a time of heightened tensions with the United States and after it seized a South Korean tanker in strategic Persian Gulf waters.

Tehran said it was now refining uranium to 20 percent purity—far above the level permitted under its 2015 agreement with world powers, but far below the 90 percent required for an atomic bomb—in a step Washington condemned as "nuclear extortion.”

The European Union noted Iran's step "with deep concern" and said it planned to "redouble our efforts to preserve the agreement and return to its full implementation by all parties.”

It was the most striking suspension yet of Tehran's commitments under its landmark deal with six nations, which has been fraying since US President Donald Trump withdrew from it in 2018 and reimposed crippling sanctions.

A war of words has flared again in the final weeks of Trump's presidency and as Iran and its allies have marked one year since a US drone strike in Baghdad killed Iran's most revered military commander, Qasem Soleimani.

Washington has meanwhile reversed an order to bring home its USS Nimitz aircraft carrier from the Persian Gulf, citing "threats" against Trump, after recently also flying B-52 bombers over the region.

Iran's Islamic Revolutionary Guard Corps has warned it is ready to respond to any attack.

'Not Hostage-Takers'

On Monday, the Guards seized the South Korean-flagged Hankuk Chemi and arrested its multinational crew of 20 near the Strait of Hormuz, a chokepoint through which a fifth of world oil output passes, alleging the tanker had polluted the area's waters.

South Korea has demanded the ship's release and deployed a destroyer to the area—though with no plans to engage in an offensive operation, an unnamed military official told Yonhap News Agency.

Seoul said it would send a government delegation to Iran to negotiate the release of the vessel and its crew. Iran's move came after Tehran had urged Seoul to release billions of dollars of Iranian assets frozen in South Korea as part of the US sanctions.

"We are not hostage-takers," said Iran's government spokesman Ali Rabiei. "It is the government of Korea that has taken over $7 billion of ours hostage on baseless grounds."

South Korea's vice foreign minister Choi Jong-kun plans to go ahead with a scheduled three-day trip to Tehran early next week, his office said.

Nuclear Tensions

Iran first announced Monday it had stepped up the uranium enrichment process at its underground Fordo site, in a move confirmed by UN nuclear watchdog the IAEA.

"We can produce about eight to nine kilograms of 20 percent enriched uranium so that we reach the 120 kilos the law requests from us," Ali Akbar Salehi, head of the Atomic Energy Organization of Iran, said on Tuesday.

Iran's conservative-dominated parliament voted for the step after the November killing of its top nuclear physicist Mohsen Fakhrizadeh, an assassination Iran blamed on Israel.

Israeli Prime Minister Benjamin Netanyahu has charged Iran's latest nuclear move proved it is seeking to build an atomic bomb—a claim Iran has always strongly denied—and pledged the Jewish state "will not allow" it to do so.

The US State Department labelled Iran's stepped-up enrichment "a clear attempt to increase its campaign of nuclear extortion, an attempt that will continue to fail.”

Trump's son-in-law and adviser Jared Kushner was in Saudi Arabia on Tuesday for a Persian Gulf regional summit, amid a broader US diplomatic strategy to build a regional united front against Iran.

As a Riyadh-led group sought to end a three-year rift with Qatar, Saudi Crown Prince Mohammed bin Salman spoke of a "desperate need" to unite and to "confront challenges... especially the threats posed by the Iranian regime's nuclear and ballistic missile programme and its plans for sabotage and destruction.”

Iranian President Hassan Rouhani's government has signalled it is ready to engage with US President-elect Joe Biden, who has likewise expressed a willingness to return to diplomacy.

Biden, who takes office on January 20, was vice president to Barack Obama, whose administration had finalised the 2015 nuclear deal and hailed it as a landmark achievement.

Iran's Foreign Minister Mohammad Javad Zarif said Tehran took the latest enrichment step "after years of non-compliance" by other parties and that "our measures are fully reversible upon full compliance by all.”

Russia's foreign ministry said in a statement it "paid tribute to the regular declarations by Iranian leaders of their willingness to return to full respect for the requirements of the agreement".

It added, however, that "additional efforts and costs will now be required to bring the Fordo site in line with the terms of the agreement."

Photo: IRNA

South Korea Contributes $2 Million To Iran Development Aid Program

The United Nations World Food Programme (WFP) has received a USD 2 million contribution from the Republic of Korea to support over the coming two years 30,000 of the most vulnerable Afghan refugees living in settlements in the Islamic Republic of Iran.  

“We’re grateful to the Government and people of Korea for their continued generosity towards refugees in Iran,” said WFP Representative in Iran, Negar Gerami. “The Republic of Korea remains WFP’s top donor in Iran having contributed USD 9.6 million to our operations since 2014.”  

WFP plans to use the funds to create income-generating opportunities for vulnerable Afghans living inside and outside of settlements. WFP will provide refugee men and women with the technical and vocational training they need to start small businesses. They will receive start-up capital after completing their training.

Those who already have the necessary skills will receive either WFP cash transfers or equipment to help them start up a small business such as carpet and kilim weaving, embroidery, tailoring and other handicrafts.   

“It is my great pleasure to be able to make this contribution to the meaningful project of ‘Income generation for Afghan refugees in the Islamic Republic of Iran’ through WFP, continuing our close partnership throughout the last six years. I hope that this project will also facilitate the betterment of living standards of the Afghan refugees by creating income opportunities for the large number of Refugees in Iran. I’d like to reaffirm that the Korean Government’s firm commitment to provide humanitarian assistance in the future as well.” said Ambassador of the Republic of Korea to Iran, Ryu Jeong-Hyun.

Iran hosts the world’s fifth largest refugee population, with nearly one million registered Afghan and Iraqi refugees.

WFP has been providing assistance to refugees in Iran since the arrival of the first asylum seekers from Afghanistan and Iraq in the late 1980s.

Photo: WFP

Iran Hails Oil-For-Goods Deal With South Korea

Iran said Saturday it had finalized a deal with South Korea to trade oil for goods, skirting renewed US sanctions.

"A mechanism has been devised for returning oil export revenues from South Korea, by which Iran's oil export revenue will be bartered with imported goods," Hossein Tanhayi, head of the Iran-South Korea chamber of commerce, told state news agency IRNA.

Washington unilaterally reimposed a crippling oil embargo on Iran last month following its withdrawal in May from a landmark 2015 nuclear deal.

South Korea—a close political ally of the United States—has cut Iranian oil purchases to zero from an estimated 285,000 barrels per day in the first six months of the year, according to Bloomberg figures.

The sanctions also target Iran's banking sector and its ability to bring dollars into the country, but leave open the possibility of trade in goods. 

Tanhayi did not give details of the mechanism, but said a "joint fund" could be opened between their respective central banks. 

South Korea is Iran's third largest trade partner after China and the United Arab Emirates. 

Bilateral trade has dropped from USD 12 billion in 2017 to USD 5.7 for the first 
10 months of 2018, according to the chamber of commerce.

Photo Credit: IRNA

US to Exempt China, India, Japan from Iran Oil Sanctions: Pompeo

The United States will exempt China, India and Japan from oil sanctions on Iran, Secretary of State Mike Pompeo said Monday, while vowing to be "relentless" in pressuring Tehran.

Hours after sweeping sanctions were reimposed following the US withdrawal from a denuclearization deal, Pompeo said eight countries would be at least temporarily exempt from the ban on buying Iranian oil due to special circumstances or so as not to disrupt energy markets.

The countries with the waivers will be China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey, Pompeo said.

“Our objective is to starve the Iranian regime of the funds it uses to fund violent activity throughout the Middle East and around the world. Our ultimate goal is to encourage them to abandon their revolutionary course," Pompeo told reporters.

A notable omission was Iraq. Had Iraq been granted a waiver, Iran might have been able to skirt sanctions by mixing its crude with its neighbor's output, analysts say.

President Donald Trump withdrew in May from the deal that his predecessor Barack Obama had reached with Iran, calling it a failure because it addressed only the clerical regime's nuclear program.

Pompeo reiterated demands for Iran to make a "180-degree turn" from its regional policies rooted in the 1979 Islamic revolution, such as support for the Lebanese militia Hezbollah.

“We hope a new agreement with Iran is possible, but until Iran makes changes in the 12 ways I listed in May, we will be relentless in exerting pressure on the regime," Pompeo said.

Pompeo said the eight countries exempted have "already demonstrated reduction of Iranian crude over the past six months and, indeed, two of those eight have already completely ended imports of Iranian crude and will not resume as long as the sanctions remain in place."

"We continue negotiations to get all of the nations to zero," he said.

Pompeo also said without specifying that the United States would exempt three non-proliferation projects underway in Iran from the sanctions.

European powers have strongly disagreed with Trump's decision, pointing out that Iran is abiding by the nuclear agreement, and have looked to create ways to allow its businesses to keep up commerce with the country.

Photo Credit: Deposit Photos

US Eyes Limited Waivers for Iran Crude Buyers

The US administration likely will enable some countries to continue importing oil from Iran in the short term, despite Washington's maximum pressure campaign against Tehran, White House national security adviser John Bolton said today.

"We understand, obviously, that a number of countries, some immediately surrounding Iran, and others that have been purchasing oil, may not be able to go all the way to zero," Bolton said at a forum hosted by the Washington-based Alexander Hamilton Society. "We want to achieve maximum pressure, but we do not want to harm friends and allies either. We are working our way through that."

The sanctions statutes that President Donald Trump re-activated in May require the administration to assess by 4 November, and every 180 days after that date, whether buyers of Iranian crude are "significantly reducing" their purchases. The administration can then sanction financial institutions in countries that it deems have not cut their purchases adequately and grant exemptions to countries that do.

The State Department is expected to provide such exemptions before the full brunt of US sanctions pressure begins on 5 November, even though the scope of waivers is yet undetermined.

China, India and Turkey were among the largest buyers of Iranian crude before the US withdrew from the Iran nuclear deal. US sanctions explicitly exclude exports of natural gas from Iran to its neighbors, but lack of guidance from Washington has created uncertainty for natural gas importers in Turkey and Iraq.

Iranian oil exports have fallen faster and by a greater amount than initially expected, as refiners in Asia-Pacific and Europe curbed their purchases, despite opposition from some of their governments.

"You already see reduction in purchases in countries like China, that you would not have expected, countries that are still in the nuclear deal," Bolton said. "European businesses are fleeing the Iranian market. Most of the big ones are already out."

Argus estimates that Iranian crude loadings fell to 1.58mn b/d in September, down by 12pc since August. But these figures do not include vessels belonging to Iran's state-owned NITC, which have stopped transmitting GPS transponder signals. Iran's exports averaged 2.5mn b/d in January-May.

Trump's decision to reimpose sanctions on Iran has contributed to higher oil prices globally, an analysis by the US Energy Information Administration (EIA) shows. But Bolton today downplayed the effect on oil markets.

"One of the things this administration has done that (former president Barack Obama's) administration did not do was to encourage producers to alter their production to make up for the lost output in Iran," Bolton said. "It has been an interesting exercise, but we have been able in some cases to find alternative purchases for the buyers of Iranian oil," he said, without providing details.

Russia and Saudi Arabia increased production since June. Opec and its non-Opec allies will produce as much as necessary to meet global demand and offset any supply disruptions, Saudi oil minister Khalid al-Falih says.

Growing US output and a lower oil import bill have enabled the administration to implement stricter restrictions than were imposed between June 2012 and January 2016 under Obama. These factors also influenced the layout of sanctions in the run-up to 5 November.

"It is important to remember the context in which the Obama administration negotiated (sanctions exemptions) in 2012," given oil prices above USD 100/bl amid a presidential re-election campaign, said Richard Goldberg, a former congressional aide who helped craft Iran sanctions legislation.

"Their strategy was to announce exemptions early to show that the US was willing to provide exemptions and demonstrate that other countries are reducing purchases from Iran," said Goldberg, a senior fellow at the Washington-based advocacy group Foundation for Defense of Democracies, which backs the administration's Iran policy.

By contrast, Trump's administration—partly as a negotiating tool—has kept the scope of waivers unclear, even as the sanctions deadline approaches. It also has yet to clarify the scope of possible financial sanctions and to explicitly exclude condensate from US sanctions.

"Ultimately the Iranians are evaluating what is going to happen on 5 November, how sanctions will be enforced" and what concessions on financial sanctions the EU has managed to extract from Washington, Goldberg said.

Forcing Iranian exports to zero remains the primary objective, Bolton said. "The president said unmistakably our goal is maximum pressure. There has to be a fundamental change in the behavior of the Iranian regime."

Photo Credit: IRNA

Iran Offers Discount Oil to Asia

Iran is selling oil and gas at a discount to Asian customers as it prepares for the return of US sanctions, state news agency IRNA reported on Monday. 

The "informed source" in Iran's oil ministry did not give details of the discount, but sought to downplay the move as common industry practice. 

"Discount is part of the nature of the global markets being offered by all oil exporters," the source told IRNA. 

Bloomberg reported on Friday that the state-run National Iranian Oil Company was reducing official prices for September sales to Asia to their lowest level in 14 years, compared with Saudi crude. 

The United States will seek to block Iran's international oil sales from November 5, when the second phase of sanctions are reimposed as part of Washington's withdrawal from the 2015 nuclear deal. 

Several key buyers, including China and India, who account for roughly half of Iran's sales, have said they are not willing to make significant cuts to their energy purchases from Iran. 

But analysts predict Iran could still see its oil sales drop by around 700,000 barrels per day from their current level of around 2.3 million. 

Much will depend on the European Union, which has vowed to resist US sanctions on Iran, but whose companies and financial institutions are more vulnerable to US financial pressure than their Asian counterparts. 

French energy giant Total has already said it is pulling out of its multi-billion-dollar investment project in the South Pars oil field in southern Iran as a result of the renewed sanctions.

Photo Credit: IRNA