HD Hyundai Oilbank will bring in 2 million barrels of crude oil through Saudi Arabia's Yanbu port for the first time ever. This is a move to import crude via the Red Sea instead of the Strait of Hormuz, and S-Oil has also been using this port recently. With the Strait of Hormuz blocked, Korea's four refiners are going all out to find alternative ports.
According to the refining industry on the 6th, HD Hyundai Oilbank plans to load 2 million barrels of crude oil—the equivalent of one very large crude carrier (VLCC)—at Saudi Arabia's Yanbu port in April.
Yanbu is a port on the western side of Saudi Arabia, facing the Red Sea. It is suitable for ships bound for Europe via the Suez Canal. But after the Strait of Hormuz was closed, it became almost the only alternative port for loading crude in Saudi Arabia.
S-Oil is also bringing in crude through Yanbu. The arrangement was possible thanks to the support of Saudi Aramco, S-Oil's majority shareholder. GS Caltex is also said to be sourcing part of its crude via the Red Sea side.
Until the Middle East crisis, Korean refiners imported most of their Middle Eastern crude through ports that pass the Strait of Hormuz. A representative port is Ras Tanura on Saudi Arabia's eastern coast.
According to the Korea International Trade Association, Saudi Arabia was Korea's largest crude supplier last year, accounting for 34.2% of the total. It was followed by the United Arab Emirates (UAE, 11.7%), Iraq (10.9%), Kuwait (8.4%), and Qatar (4.4%), all Middle Eastern countries.
According to the Korea Institute for International Economic Policy (KIEP), the share of Korea's crude imports from the Middle East fell from 82.5% in 2015 to 59.8% in 2021, a decrease of about 22.5 percentage points (P) over six years.
Then, after the Russia-Ukraine war, it rose again to 71.9% in 2023 and has remained around 70% for three consecutive years through 2025. Also, 99% of Middle Eastern crude passed through the Strait of Hormuz.
However, the last time a ship carrying crude imported by Korean refiners passed through the Strait of Hormuz was on Feb. 28. The tanker Eagle Valour departed Al Basrah, Iraq, on Feb. 26 and passed through the Strait of Hormuz on Feb. 28, when the United States struck Iran.
The crude on the Eagle Valour was under contract to HD Hyundai Oilbank and entered Daesan Port in Seosan, South Chungcheong, on the 20th of last month. Since then, none of the ships contracted by Korean refiners have passed through the Strait of Hormuz.
Since then, Yanbu, on Saudi Arabia's western Red Sea coast, has emerged as an alternative port that routes through the Red Sea. Saudi Arabia is sending crude from eastern fields such as Ras Tanura to Yanbu on the Red Sea via its domestic east–west pipeline across the Arabian Peninsula.
Before the war, less than 100,000 barrels of Saudi Arabia's 7 million barrels of exported crude were loaded at Yanbu. But according to major foreign media, in March Saudi Arabia exported nearly 100% of its shipments through Yanbu.
The rise in transportation costs from changing the loading port can burden refiners. Even so, refiners are working hard to secure Middle Eastern crude because they judge that it is better to keep plants running—even at higher expense—than to halt refinery operations.
A refining industry official said, "Freight rates have risen and we cannot pass through the Strait of Hormuz, so expenses have increased, but we need to secure as much available Middle Eastern crude as possible."