Import Diversification
Korean oil refiners are diversifying their crude oil exporters to stably secure crude oil and enhance its profitability. Even though Korea still depends much on oil from the Middle East, its proportion is on a gradual decline.
According to the oil refinery industry, GS Caltex will import one million barrels of oil from the Eagle Ford Group of the US in November. Although crude oil condensate or Alaskan crude oil was imported to Korea before, it will be the first time for a Korean company to import crude oil from the mainland US. The US government prohibited US crude oil from being exported to Korea. But last year, the ban was lifted.
But some analysts say that a more direct reason is that profitability was secured. The opening of the Panama Canal reduced the transportation period of oil by at least ten days compared to routes that pass the Cape of Good Hope.
Korea is ramping up oil imports (including imports of crude oil condensate) from Iran. This year, Korea imported 65,832,000 barrels of Iranian oil until August. The volume is a 112% increase from a year before. In particular, imports of crude oil condensate are on a sharp rise. Crude oil condensate is ultra-light oil produced during the development of gas or oil. When refined, it can produce more naphtha than general crude oil.
By company, Hanwha Total which imported two million to four million barrels of oil every month, dialed up the proportion of Iranian crude oil condensate by taking into account a drop in crude oil condensate prices. SK Incheon Petrochem imports 66% of its total crude oil condensate from Iran. Hyundai Oil Bank said that they will increase its Iranian crude oil condensate imports from current two million barrels.
Korea is increasing Iranian crude oil condensate imports as relatively cheap Iranian products were released to the Middle Eastern crude oil condensate market dominated by Qatar.