US Oil Imports
Korean refineries are moving quickly to import crude oil from the U.S. Recently, U.S. condensate (ultra light crude oil) was imported for the first time in 39 years. Import of Alaskan crude oil also started again, which was suspended after the year 2000.
According to the industry, an oil tanker of GS Caltex loaded with 800,000 tons of crude oil produced in the North Slope oilfield located in Northern Alaska, U.S., will arrive at Yeosu port, South Jeolla Province, on Oct. 10. There have been no imports of Alaskan crude oil at all for the past 14 years. GS Caltex imported the U.S. condensate through Yeosu on Sept. 10 as well for the first time in 39 years.
The U.S. has been prohibiting the export of crude oil under the Energy Policy and Conservation Act of 1975, after the Middle East oil embargo. However, the Clinton Administration made Alaska an exception in 1996. After 2004, Alaskan crude oil has not been traded in international markets due to conflicts in price.
Some say that the import of the Alaskan crude oil this time is largely due to effects of shale gas in the U.S. After the shale evolution, crude oil production in the U.S. surged, and the competitiveness of Alaskan crude oil, which has a relatively low price, was hurt. This is why Alaskan crude oil started to be traded internationally after the price was adjusted.
According to the U.S. Energy Information Administration (EIA), daily crude oil production in the U.S. increased from 5.61 million barrels in January 2011 to 8.53 million barrels in July this year. The U.S. is expected to become the largest oil-producing country, beating Saudi Arabia, by 2020. As the oversupply of crude oil is getting serious in the U.S., the export of Alaskan crude oil is likely to increase.
However, import of Alaskan crude oil this time will not quite help Korean refineries to diversify crude oil suppliers. GS Caltex did not directly import Alaskan crude oil, but purchased it from an intermediary vendor (distribution company) on a spot basis. Whether Korean refineries will additionally import the Alaskan crude oil or not is not known yet.
Korean refineries are still very interested in this case, as they need to be prepared, securing suppliers and checking the quality, for the possible situation in which U.S. crude oil is officially and legally allowed to be imported.