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South Korea and Tehran agree on “proposals” regarding billions of oil after the seizure of oil tankers

Iranian Navy commandos board a ship in the Gulf of Oman, August 12, 2020 (AP pic)

Seoul said Tuesday that South Korea and Iran have agreed on a way forward that could free up billions of dollars in frozen oil money, but indicated that the deal is actually subject to approval by the United States.

Last month, Tehran seized a tanker flying the South Korean flag in sensitive Gulf waters, citing “the ship’s repeated violation of marine environmental laws.”

The seizure of the tanker came after Tehran urged Seoul to release billions of dollars in Iranian assets frozen in South Korea under US sanctions over its nuclear program.

The South Korean Foreign Ministry said the governor of Iran’s central bank and the Seoul ambassador reached an agreement in Tehran.

“Iran has accepted our proposals to use the fund,” the ministry said in a statement, without going into details.

There have been suggestions that the money could be used to buy vaccines for the Coronavirus, or to pay Iran’s debts at the United Nations.

But the South Korean ministry added: “The actual lifting of the funds freeze must pass through consultations with relevant actors, including the United States.”

The comment suggests that Washington – which insists that Iran move first in the nuclear confrontation – will have a de facto veto over any transfers.

The Iranian government issued a separate statement about the deal, quoting Central Bank of Iran Governor Abdul Nasser Hemmati as saying that it will continue to demand compensation from South Korean banks.

“The South Korean side needs to make a lot of efforts to erase this negative record,” he added.

Tehran was a major supplier of oil to resource-poor South Korea until Washington’s bases blocked purchases.

Then-US President Donald Trump withdrew from Washington in 2018 from a landmark nuclear deal with world powers, then re-imposed tough sanctions on Iran and strengthened it.

According to Iranian government spokesman Ali Rabiei, Tehran has funds worth $ 7 billion withheld in Seoul.

Tehran has repeatedly denied any link between the seizure of the ship and the issuance of the funds, and said earlier this month that it had agreed to allow the crew to leave in “a humanitarian move.”

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