Iranian officials have offered accident insurance coverage worth a maximum of $1 billion for Iranian tankers shipping Iranian crude oil to South Korea, a Hyundai Oilbank official, who declined to be named, said Wednesday.
Hyundai Oilbank and SK Innovation , which fully owns the nation's other refiner, SK Energy, are considering Iran's offer, officials from both companies said.
Both companies imported crude oil from Iran until European Union sanctions that took effect July 1 effectively cut off insurance on Iranian crude shipments July 1.
The EU sanctions, which targeted Iran's crude-oil exports over its disputed nuclear program, prohibit European companies from insuring Iranian crude-oil shipments.
The South Korean refiners are considering using the ships of NITC, or National Iranian Tanker Co., they said.
Hyundai Oilbank is negotiating the details--including the offer of insurance and the number of monthly shipments--with Iranian officials, the Hyundai Oilbank official said.
An agreement may be reached by the end of the month, he said.
Meanwhile, Hyundai Oilbank is waiting for the government, which apparently finds the Iranian proposal "acceptable," to give it its official blessing, he said.
A government official who asked not to be identified told Dow Jones Newswires earlier this week that government officials were leaning toward accepting the Iranian insurance proposal but that it was "too early to say" whether it would be approved.
South Korea generally relies on Iran for around 10% of its crude-oil requirements. That fell to 7.5% in the January-May period as Seoul reduced imports in an effort to gain an exemption from U.S. sanctions against Iran.
India, meanwhile, has already started using Iranian tankers to import crude. Officials in India, which relies on imported oil for three-quarters of its needs, have said the nation can't afford to stop importing from Iran totally and is making its own insurance arrangements.
India's state-run insurance firms have agreed to offer coverage of up to $50 million for each Indian ship carrying Iranian crude.