Oil Import Diversification
African crude oil accounted for 2.55 percent of Korea’s imports as of June this year, jumping up from 0.88 percent last year.
Imports of African crude oil are surging. Imports from January to June this year already exceeded total imports last year.
According to the refining industry on August 18, the African crude oil that SK Energy, GS Caltex and Hyundai Oilbank imported from January to June this year totaled 11.4 million barrels, exceeding the 8.09 million barrels last year.
Considering the trend until June, imports of African crude oil are expected to break 20 million barrels this year. The main source countries this year are the Congo (2.76 million barrels), Equatorial Guinea (2.61 million barrels), and Gabon (2.58 million barrels).
Crude oil from Africa accounts for a higher portion of all imports. African crude oil accounted for 0.88 percent last year, but 2.55 percent as of June this year.
Refining companies are increasing imports from Africa in order to diversify import networks. They aim to decrease their dependency on the Middle East, especially after the Iraqi civil war. They also want to secure as much cheap crude oil as possible.
The average import price of African crude oil is US$109 per barrel, US$1 higher than the Middle East. However, spot cargo can be imported at cheaper prices. An SK Innovation employee said, “As refining companies are facing financial difficulties, they want to secure cheap African cargo on a spot basis. They are alto utilizing a government subsidy on freight when crude oil is imported from non-Middle Eastern countries.”