Saudi Aramco has signed a rare long-term crude oil supply deal with S-Oil of South Korea in an apparent attempt to defray fears in the Asian country about supply losses from Iran.
Last month, the European Union’s imposed sanctions (OGJ Online, Jan. 26, 2012).
The deal assures S-Oil, in which an Aramco unit is the largest shareholder with a 35% interest, of the crude it needs for its 669,000 b/d refinery at Onsan. Aramco has been filling most of the refinery’s crude needs under contracts renewed annually.
The package of sanctions imposed by the EU in response to Iran’s nuclear development, coupled with a toughening of sanctions in place in the US, embargoes purchase of Iranian crude by EU members and complicates financing by other countries.
South Korea recently has imported about 240,000 b/d of Iranian crude, about 10% of its supply.