Since the Strait of Hormuz was closed and supplies of Middle Eastern crude were cut off, Latin America and North Africa have emerged as alternative crude import sources. In particular, Latin America produces heavy crude similar to Middle Eastern grades, so domestic refiners are rapidly increasing imports.
According to the refining industry on the 12th, domestic refiners have newly begun bringing in crude from Ecuador, a Latin American country, and Libya in North Africa since March.
A refinery official said, "Ecuadorian crude is heavy, making it suitable for producing products through domestic facilities," and noted, "Libyan crude is light, but it has the advantage of yielding a lot of naphtha, a basic feedstock for petrochemical products."
According to Korea National Oil Corporation (KNOC), crude imported from Ecuador in March totaled 22.77 million barrels. That exceeds the volume imported from Qatar in the Middle East during the same period (18.81 million barrels). From Libya, 5.23 million barrels of crude were imported.
It is the first time in 10 months, since April last year, that the domestic refining industry has imported crude from Ecuador. Moreover, since Jan. 2022, the March volume is the largest among crude volumes brought in from Ecuador. The fact that Ecuadorian crude is a heavy grade similar to Middle Eastern crude played a role. While heavy crude requires a more complex refining process and entails higher expense, it is relatively cheaper than light crude, which benefits domestic refiners equipped with upgrading facilities.
The refining industry is also focusing on Libya. According to the International Energy Agency (IEA), Libya's oil reserves total 48.4 billion barrels, or 2.7% of the global total, ranking first in Africa and 10th in the world. Domestic refiners had not brought in crude from the country since July 2017 due to political turmoil there, but with war breaking out between the United States and Iran at the end of Feb., they have turned their attention to Libyan grades.
A refining industry official said, "With the Strait of Hormuz closed, many refiners recently recognize the need to move away from a Middle East–centric crude import structure and diversify their sources."