The share of Saudi crude in South Korea’s oil imports dipped below 30% for the first time since 2021, as the resource-poor G7 economy moved to diversify supplies amid the Middle East crisis.
In the period January to August, Saudi crude oil accounted for 29.9% of total South Korean crude imports, local news agency Yonhap reported on Monday, citing data from Korea National Oil Corp. and the Korea Petroleum Association.
Saudi Arabia has remained South Korea’s top crude oil supplier despite the slump in its share of total imports, which was the first time since the COVID-19 pandemic that the Kingdom’s share has dropped below 30% of South Korea’s purchases.
South Korean refiners started in March to seek alternative sources as the war in Iran led to the closure of the Strait of Hormuz, stranded a part of the Saudi shipments, and resulted in oil and freight price spikes.
Diversification efforts by South Korea led to the share of U.S. crude oil in Korean imports topping 20% for the first time in April and remaining above 20% ever since.
South Korea has turned to alternative suppliers amid the crippled deliveries from the Middle East. South Korea in April secured 273 million barrels of Middle Eastern and Kazakh crude that will not need to transit the Strait of Hormuz—volumes that would sustain its economy for more than three months.
South Korea also agreed with Canada in June to triple its crude imports from Canada this year and boost LNG purchases from Canadian export projects in the coming years as the Asian economy looks to diversify energy supply amid the massive oil and gas supply shock in the Middle East.
Currently, South Korea imports as much as 70% of its crude oil from Middle Eastern producers, and most of it must pass through the Strait of Hormuz. But South Korea will try to cut its reliance on Middle East crude imports to 50% by 2035, the country’s industry ministry has said.
By Tsvetana Paraskova for Oilprice.com
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