US allies starved of Iran crude

singapore — Iranian oil shipments to some US allies are being threatened even before America’s November 4 deadline for buyers to curb imports and comply with renewed sanctions on the Opec member.

September-loading cargoes are set to be the last to head for Japan if the Asian nation doesn’t receive an exemption from the US, people with knowledge of the matter said.

South Korea, meanwhile, is said to be facing problems with July shipments because of tanker-insurance and chartering issues, with buyers already shunning a form of oil known as condensate from the country.

A Taiwanese refiner is mulling ending purchases.

The risk of disruptions sooner than early November signals how diplomatic allegiances are affecting the oil market after Donald Trump’s decision in May to reimpose restrictions on the Islamic Republic over its nuclear program. Close American allies such as South Korea and Japan are grappling with how to sustain their ties with the US without jeopardizing their energy industry as well as their relationship with long-time crude supplier Iran.

“We are in a knotty situation as we have to listen to the United States, but at the same time Iran is an important supplier of crude and condensate,” said Kim Jae Kyung, a research fellow at Korea Energy Economics Institute. — Bloomberg