* Korea, China and India crude imports from Iran fall
sharply
* US decision on sanctions waivers due early December
* Iran's oil exports more than halved by sanctions
SEOUL/NEW DELHI, Nov 30 (Reuters) - Asia's top buyers of
Iranian crude are likely to secure U.S. approval to continue
imports from the Islamic Republic without incurring sanctions,
after cutting volumes sharply in the second half of the year,
according to government and trade sources.
Government officials in India and South Korea said they
expect waivers from U.S. sanctions on Iran, secured in the
middle of the year, to be rolled over for another six months. In
China, the top buyer of Iranian crude and the Islamic Republic's
largest trade partner, traders said the main state-run oil
importers expect a further exemption.
The United States is due to decide early in December whether
to extend the waivers, which it granted on condition that
countries cut their crude imports from Iran. A renewal means
banks in the three countries get another reprieve from the
threat of being cut off from the U.S. financial system.
The sanctions aim to choke Iran's oil trade, the main source
of the country's hard currency, and to force the government to
curb its nuclear programme. The West says Iran is using the
programme to develop nuclear weapons, which Tehran denies.
Tough U.S. and European sanctions have more than halved OPEC
member Iran's oil exports, and most of what is left flows to
Asia. Exports fell to 1.3 million barrels per day in October and
around 1 million bpd in the two previous months.
"We are expecting a very positive result as our imports in
the second half of this year were very low," a South Korean
economy ministry source who has direct knowledge of the matter
told Reuters by phone.
"The announcement will be made around Dec. 7 on the U.S.
state department website as the starting date of the new
extension is Dec. 8. We already have completed talks with the
United States," the source said.
South Korea's imports from Iran during the first 10 months
of the year stood at 44.55 million barrels, down 40 percent on
the year, according to state-run Korea National Oil Corp (KNOC).
"We will definitely get the waiver renewed. We have
substantially cut imports from Iran in the six months, so I
don't see any problem," said an Indian government source privy
to the country's talks with the United States.
From April, the starting month for annual term contracts,
India's imports from Tehran are down 19 percent to about 257,000
bpd to end-September, tanker discharge data shows.
A State Department spokesman said that decisions on
extending the exemptions would not be made until early December.
South Korea and India got their initial waivers on June 11,
followed by China on June 28. All are due for renewal in
December. Japan, the other big Asian buyer of Iranian oil, had
its waiver renewed in September.
In China, traders familiar with the government's thinking
said there was an expectation its exemption would be extended
because of the extent of cuts in imports. The average monthly
decline in Iranian crude imports from a year earlier was more
than 20 percent between July and October, according to customs
data.
DEARTH OF SHIPS
EU sanctions on insurance have led to a dearth of vessels to
ship the oil, forcing China, South Korea and India to rely on
Iran's shipping fleet. The fleet is too small to keep up with
demand, so many buyers have had to cut imports whether they
wanted to or not.
China, the world's second-largest oil consumer, has
repeatedly voiced its opposition to unilateral sanctions such as
those imposed by the United States. It says any measures should
be multilateral and agreed under the purview of the United
Nations.
Still, China's imports have fallen in recent months as
Iranian tankers struggled to ship even the reduced volumes
requested by importing countries. Earlier this year, China
slashed imports by as much as half as the country wrangled over
annual contract terms with Tehran.
China, Iran's top oil customer and biggest trade partner,
has cut imports 22.2 percent in the January-October period to
424,000 bpd compared with a year earlier, customs data shows.
Once the waivers are secured, the focus will be on what
countries need to do to secure another 180 day extension of the
waivers.
Asian refiners are reluctant to slash purchases beyond the
roughly 20 percent cut made this year as many of them operate
plants configured to process Iranian crude. Extending the switch
to different grades will be a technical challenge for some and
incurs costs.
(Additional reporting by Aizhu Chen in BEIJING and Luke
Pachymuthu in SINGAPORE; Writing by Manash Goswami; Editing by
Simon Webb, Aaron Sheldrick and Michael Urquhart)