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30 January 2012 - 22:19

South Korea's finance minister says his country needs more time to diversify oil sources before it will be able to join US-led sanctions on importing Iran's crude oil.

Bahk Jae-wan was quoted by AFP as saying on Monday that negotiations with the US were underway, but Seoul needs to take a gradual approach to banning oil imports from Iran to minimize damage to its economy.

"Each nation has different circumstances...so there are many factors to consider...including what to do with existing contracts," he added, noting that the current volume of Iranian oil imports is "quite large."

South Korea imports nearly 10 per cent of its crude from Iran.

"We are discussing with the US government in the matter of how much is 'significant' and I believe the discussions...will take quite a bit of time," the minister said.

Bahk added that Saudi Arabia has offered to increase crude oil supplies to South Korea but cautioned that diversifying oil sources takes more time and policy coordination.

He vowed the government will make "utmost efforts" to prevent sanctions from triggering a dramatic surge in oil prices and fuelling inflation in the country which is one of the government's top policy concerns this year.

South Korean President Lee Myung-bak will visit Saudi Arabia, Qatar and the United Arab Emirates next week, to help the country "secure a stable supply of energy resources," his office announced.

On December 31, 2011, US President Barack Obama signed into law new sanctions against Iran, which seek to penalize foreign institutions that do business with Iran's central bank and oil sector.

South Korea, the world's fifth largest oil importer, is a close ally of the United States and 28,500 US troops are based in the country.

Seoul in December added more than 100 names to a financial blacklist of Iranian firms and individuals, joining a fresh multinational effort to press Iran over its peaceful nuclear program. But it did not announce a ban on imports of petrochemicals or crude oil.
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