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Iranian oil funds held in Korea to be returned

Posted August. 12, 2023 08:02,   

Updated August. 12, 2023 08:02


The U.S. and Iran have agreed to release around $7 billion in frozen funds linked to oil deliveries to Korea. This comes in exchange for the release of American detainees held in Iran. A Korean government official revealed on Friday that discussions about this deal had taken place between the U.S. and Iran. The official clarified that the situation is sensitive as it involves a trade-off between detainee release and fund release. If the deal holds, the unfreezing procedure could be concluded by the start of this autumn. The transfer process to an intermediary bank in Switzerland has reportedly commenced on Friday, as stated by relevant financial authorities.

The U.S. National Security Council stated on Thursday (local time) that they “have received confirmation that Iran has released from prison five Americans who were unjustly detained and has placed them on house arrest.” U.S. Secretary of State Tony Blinken called it “the beginning of the end of their (the detainees’) nightmare.” The Iranian Foreign Ministry revealed that the detainees were released under U.S. confirmation to unblock Iranian funds held in Seoul for years.

The funds have been blocked in Korea since 2019 due to U.S. sanctions. Iran's pressure on fund disputes escalated, leading even to the seizure of a Korean tanker in the Strait of Hormuz.

Resolving the frozen oil funds issue eases tensions between Korea and Iran, ensuring a stable energy supply and safe passage for Korean vessels through the Strait, where over 70% of Korean oil imports transit. Fostering better relations with Iran, a vital player in the Middle East with abundant human and material resources, can broaden Korea's diplomatic and economic horizons.

Jin-Woo Shin niceshin@donga.com