S Korea to work with US to reduce Iran oil imports

South Korean officials said today that they will continue working with the US to reduce oil imports from Iran after President Barack Obama greenlighted potential sanctions against countries that continue to buy Iranian oil.

South Korea is one of several major importers of Iranian oil that have not received exemptions from the US sanctions.

Obama announced yesterday that he is plowing ahead with the potential sanctions, which could affect US allies in Asia and Europe, as part of a deepening campaign to starve Iran of money for its disputed nuclear program.

The sanctions aim to further isolate Iran's central bank, which processes nearly all of the Iran's oil purchases, from the global economy.

Obama's move clears the way for the US to penalise foreign financial institutions that do oil business with Iran by barring them from having a US-based affiliate or doing business here.

Obama's goal is to tighten the pressure on Iran, not allies, and already the administration exempted 10 European Union countries and Japan from the threat of sanctions because they cut their oil purchases from Iran. Other nations have about three months to significantly reduce such imports before sanctions would kick in.

Foreign Ministry officials in South Korea said Saturday that they expect to reach an agreement with Washington by late June on reducing oil imports from Iran. The officials declined to be named because discussions were still under way.

South Korea has already restricted financial dealings with more than 200 groups and individuals with suspected links to Iran's nuclear program. Seoul relies on Iran for up to 10 per cent of its oil.