Korea Seeks to Reduce Trade Surplus
The U.S. Energy Information Administration (EIA) announced on April 7 that Canada imported 138 million barrels of U.S. crude oil last year to become the largest importer and it was followed by South Korea (86.15 million), China (83.32 million), the Netherlands (53.17 million), India (48.22 million), Italy (45.98 million) and Taiwan (44.67 million). During the period, South Korea increased its annual U.S. crude oil imports approximately four-fold and accounted for 11.8 percent of the United States’ total crude oil exports, 731.4 million barrels.
Such a rapid increase has to do with the lowered price of U.S. crude oil, which is attributable to an increase in shale oil drilling, and South Korea’s move to reduce its trade surplus with the United States. As of April 4, the WTI price was US$62.1 per barrel, about US$6 lower than the Dubai crude price. The South Korean government has encouraged the import of U.S. crude oil. As a result, South Korea’s trade surplus with the United States reached US$13.8 billion last year with a year-on-year decrease of US$4.1 billion.
South Korea’s ranking rose by China reducing its U.S. crude oil imports amid its trade disputes with the United States, too. Early last year, China’s monthly U.S. crude oil imports used to amount to 10 million barrels. However, China imported no crude oil from the United States in August, September and October last year.
Experts point out that South Korea exceeds Canada when it comes to net imports. Canada exported 1,348.35 million barrels of crude oil to the United States last year. At present, Canada imports U.S. crude oil to dilute its high-viscosity crude oil and sells its oil to the United States after the dilution.
Meanwhile, South Korean oil companies are trying to reduce their dependence on crude oil from the Middle East by using that from the United States. In addition, competition in the shipping industry has led to a decrease in U.S. crude oil transport cost.