Saturday, March 31, 2012

South Korean oil imports from Iran continues to rile US

What a difference half a decade makes. In the mid-2000s, the K-blogosphere frequently characterized Seoul as a bad ally of Washington. I believe it was One Free Korea that had a posting category entitled "the end of an alliance," which highlighted the eventual parting of ways between the ROK and the US.

(This despite Roh Moohyun's political capital-eroding decision to send what was the third largest contingent of troops to the highly unpopular Iraq War (even if they saw little fighting) and his efforts to push for a free-trade agreement that would bring South Korea closer to the United States economically, while also giving the green light for a naval base on Cheju-do that would make South Korea's military, particularly its navy, a more effective military partner with the United States.)

But Roh Moohyun and George W. Bush were, to some degree, ham-handed political figures without a sense of the big picture, who had stumbled into the Blue and White Houses almost by accident and happenstance. Where there was a great deal of common ground, Roh's efforts to also make nice with China and North Korea riled a Washington that had a philosophy that "you're either for us or you're against us" on all matters.

When both presidents, and their respective parties, were gone from their respective color houses, we got pragmatic heads-of-state who saw the need and opportunity to bring their countries back in line with each other. Both see China as a potential threat that is easier to mitigate by closing ranks, both see North Korea's brinkmanship as something that needs to be addressed head on, and both worked hard to do what their predecessors could not do with the aforementioned FTA.

The result of this and other actions and factors is that Seoul is now seen by Obama's Washington as the reliable ally that Tokyo once was (the Japanese leadership seems to be going through it's own Roh Moohyun phase). I think this will likely continue even if we see a Romney or Santorum administration, regardless of who is elected in South Korea at the end of this year (since both left and right have growing concerns about China and even North Korea).

That is a very long introduction to a short article on what's in the title up there. Despite three decades of its military and political patron having an extremely adversarial relationship with Iran, South Korea has continually engaged Iran economically, both as an exporter of electronic goods, cars, heavy machinery, and even construction, and as an importer of oil.

The irony is palpable if you take the short jaunt from the US military's Yongsan Garrison, across the river to Teheran-no Boulevard, long one of the major streets cutting across Seoul's affluent south bank of the Han River.

It has come to a head with the Obama administration's aggressive diplomatic efforts to isolate Iran over its assumed nuclear weapons development, which is itself meant to preclude a military attack by Israel or even the United States. In short, Washington needs Tehran to feel the pain if it doesn't abide by its international agreements and put an end to its nuclear brinkmanship (dang, used that word twice now).

But South Korea, like neighboring Japan, is a prosperous country that is energy-poor. The disaster at Fukushima has meant a reduction in nuclear output in Japan that may carry over to South Korea, while putting pressure on the two countries to import more energy resources. For them, the pain of cutting off Iranian oil supplies is perhaps too great.

According to the Washington Post, the Obama administration seems to be getting South Korea's (and Japan's) predicament and may offer an exemption, but it hasn't so far:
South Korean officials said Saturday that they will continue working with the U.S. 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 U.S. sanctions.

Obama announced Friday that he is plowing ahead with the potential sanctions, which could affect U.S. 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 U.S. to penalize foreign financial institutions that do oil business with Iran by barring them from having a U.S.-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 percent of its oil.
Like it or not, Washington tends to look at Europe and Asia separately, so with Japan having already received an exemption, it looks like South Korea can, too, but the cuts will be painful. I haven't had to fill up the Kia with gas lately, but I suspect this isn't helping keep energy prices down lately.

And over here, we're feeling the pinch with gas prices as well. Hawaii, as many of you may be aware, routinely has the highest gas prices in the country, so it is a collective pain we're all feeling. Will South Koreans feel the need to join the American effort to curb Iran's nuclear ambitions? Were enough people paying attention to the recent summit in Seoul about that very issue?

Hopefully the ROK leadership will stay focused on that issue no matter who is in power come next February, but I imagine the left is torn a bit: on the one hand, supporting American efforts to aggressively fight nuclear proliferation seems like gross hypocrisy given the 1000+ nuclear weapons the US has in its arsenal (even if Obama is trying to work out a deal with Russia to reduce this further), while on the other hand, nukes are to leftists one of the worst things imaginable. Since even the most ardent leftist leaders in South Korea still look to Washington as a protective military ally and an economic partner, I'm guessing they'll fall in line.

But it's that feeling of "falling in line" amidst so much pain (been there, done that many times) that has the power to agitate the populace and erode the Seoul-Washington alliance at least a little on the edges.

Aloha Gas in Waikiki at $4.469 yesterday. I had lent my car to a friend and decided to walk to my doctor's appointment in Waikiki, passing this station, which is typical. Costco may be about 20¢ cheaper, but for the most part, we're at four and a half bucks per gallon here in the islands. And that has me feeling not a lot of aloha, but it's still way cheaper than what I've routinely paid in Seoul (but there I had a full time job or two). 


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