OPEC Member Countries Reducing Output
S&P Global Platts reported on April 8 that South Korea’s average monthly U.S. crude oil imports for the first half of this year are estimated at seven million barrels or more. For reference, South Korea’s total U.S. crude oil imports were 60.94 million barrels last year, 5.85 million barrels in the first quarter of 2018, and 20.94 million barrels in the first two months of this year.
The Korea Petroleum Association, in the meantime, recently announced that U.S. crude oil accounted for 12.6 percent of the crude oil South Korea imported in February this year, ranking third behind those from Saudi Arabia and Kuwait. The ratio rose by 3.4 percentage points in just one month. It stood at 1.2 percent and 5.5 percent in 2017 and 2018, respectively. In short, South Korea’s U.S. crude oil imports are increasing rapidly these days.
“OPEC member countries are reducing their production to a large extent, causing a rise in the Dubai crude price,” S&P Global Platts explained, adding, “Under the circumstances, South Korea’s crude oil imports from the Middle East are likely to fall in the second quarter unlike its imports from the United States.”
Still, most in the industry point out U.S. crude oil cannot replace that from the Middle East in that South Korean oil companies’ facilities are optimized for the latter. “South Korea is importing more and more crude oil from Latin America as well as the United States,” one of them said.