Hyundai Oilbank has signed a long-term gasoline export contract with a Mexican oil company, becoming the first Korean refinery to export gasoline to Mexico.
Hyundai Oilbank said on October 3 that it has signed a contract with P.M.I, a state-run oil company in Mexico, to supply 2.1 million barrels of gasoline in the first half of next year.
By striking the deal, Hyundai Oilbank has become the first Korean oil refinery to sign a long-term gasoline supply contract with a Mexican state-run oil company without a spot trader in the middle. Long-term direct sale deals are advantageous in that companies can sell their products stably under certain conditions, unlike spot market transactions through traders.
In particular, Hyundai Oilbank expects the direct deal with the Mexican company to serve as a bridgehead for expanding exports to Latin America in the future. The company has been interested in the Latin American market to diversify its export markets. Since 2015, Hyundai Oilbank has been intermittently exporting petrol to Mexico, Guatemala, and Ecuador through spot markets.
In addition, Hyundai Oilbank is steadily expanding its export markets beyond Asia, its traditional gasoline export market. For instance, New Zealand began trading with Hyundai Oilbank in 2013, importing more than five million barrels a year from the company. Hyundai Oilbank products account for 25% of the gasoline market and 54% of the imported gasoline market in New Zealand.
Last year, it also signed a contract to supply up to 1.2 million barrels of gasoline to South Africa by the end of this year.
As a result, this year, Hyundai Oilbank's proportions of regional gasoline exports are 57 percent for Asia, 29 percent for Oceania and 13 percent for the Americas. In 2013, its gasoline exports to Asia, Oceania and the Americas accounted for 77 percent, 18 percent and four percent, respectively. As the proportion of exports to Asia decreased, the oil refinery made great progress in the diversification of its export regions.