IRAN-KOREA OIL STANDOFF

TEHRAN: A row between Iran and South Korea is intensifying, with Tehran threatening legal action unless Seoul releases more than $US7bn ($A9.5bn) in funds for oil shipments frozen by US sanctions.

The Islamic republic was South Korea’s third-largest Middle Eastern trade partner before the US unilaterally withdrew from a 2015 nuclear deal between Tehran and world powers and reimposed crippling sanctions.

Iran had been a key oil supplier to resource-poor South Korea and in turn imported industrial equipment, household appliances and vehicle spare parts from Seoul.

“We have $US7.8bn of our money blocked in South Korean banks,” said Iranian politician Alireza Salimi, adding Seoul took delivery of the oil “but did not pay for it”.

A foreign ministry official in Seoul said it was “difficult to confirm” the exact amount.