"The Iranian side and local oil refineries are discussing the measure of using Iranian oil tankers (for the imports)," the government source told Yonhap news agency on condition of anonymity.
"The discussion is making progress," the source added.
South Korea's crude oil imports from Iran have been suspended since the early-July insurance embargo, which is part of the EU's broader sanctions against Iran for its nuclear programs.
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 said.
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 cut off insurance on Iranian crude shipments July 1.
The EU sanctions, which targeted Iran's crude-oil exports over its civilian nuclear program, prohibit European companies from insuring Iranian crude-oil shipments.
The South Korean refiners are considering using the ships of the National Iranian Tanker Company (NITC), 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.
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 US 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 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.
irna/281
South Korea is likely to resume oil imports from Iran as early as next month, a Korean government source said Wednesday, after imports were halted because of a European Union ban on insuring Iranian oil shipments.
News ID 182403
