U.S. crude accounted for the largest share of oil imported by Korean refiners in April, overtaking Saudi crude. The shift came as the Strait of Hormuz has been blocked for a fourth month amid the U.S.-Iran war, making it harder to procure Middle Eastern oil.
According to crude oil trade statistics from the Korea National Oil Corporation (KNOC) on the 2nd, U.S. crude imports reached 167,870,000 barrels in April, about 26% of Korea's total crude imports of 644,980,000 barrels, the largest volume from a single country.
That figure exceeds the 159,460,000 barrels imported from Saudi Arabia in April, previously the largest supplier. This is the first time in monthly data that imports of U.S. crude have surpassed those of Saudi crude.
Imports of U.S. crude, which had been declining for a time, increased to 172,090,000 barrels in March after the U.S.-Iran war began in February. By contrast, crude imported from Saudi Arabia fell to 250,420,000 barrels in March from 267,710,000 barrels in February and then decreased more sharply in April.
Imports from other Middle Eastern countries are also declining. Crude imported from Kuwait in April was 97,470 barrels, down more than 97% from 3,515,000 barrels in March. In the case of Qatari crude, the volume fell from 4,464,000 barrels in January to 1,687,000 barrels and 1,881,000 barrels in February and March, respectively. In April, imports of Qatari crude were cut off.
With the Strait of Hormuz blockade dragging on, Korean refiners turned to U.S. crude, which is relatively cheaper to procure than Middle Eastern grades. In April, the import price of U.S. crude was $103 per barrel. During the same period, Saudi crude was $117 per barrel, United Arab Emirates (UAE) crude was $121 per barrel, and Kuwaiti crude was $156 per barrel.
The government's decision to compensate additional freight costs for crude imported from outside the Middle East is also cited as a reason for the increase in U.S. crude imports.
The Ministry of Trade, Industry and Resources expanded the reimbursement range for increased freight differentials on non-Middle Eastern crude imports from 25% to the full amount starting in April, aiming to ease the burden on refiners struggling to import Middle Eastern crude. As a result, imports of Canadian crude also surged from 5,780,000 barrels in March to 16,760,000 barrels in April, along with U.S. crude.