Among the crude oil imported by Korean refiners, the share of U.S. crude took the top spot in April, overtaking Saudi crude. The reason is that the Strait of Hormuz has been blocked for the fourth month amid the war between the United States and Iran, making it difficult to procure Middle Eastern crude.
According to crude oil export-import statistics from the Korea National Oil Corporation (KNOC) on the 2nd, U.S. crude imports stood at 167,870,000 barrels in April, about 26% of Korea's total crude imports of 644,980,000 barrels, the largest from a single country.
This surpasses the 159,460,000 barrels imported from Saudi Arabia in April, which had been Korea's largest crude supplier. This is the first time in the monthly tally that imports of U.S. crude have exceeded those of Saudi crude.
U.S. crude imports, which had been declining for a while, increased to 172,090,000 barrels in March after the war between the United States and Iran 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 decreased more sharply in April.
Imports of crude from other Middle Eastern countries are also decreasing. 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, imports 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 stopped.
As the blockade of the Strait of Hormuz dragged on, Korean refiners turned to U.S. crude, which is relatively cheaper to procure than Middle Eastern grades. In April, the import cost 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 subsidize additional freight costs when importing crude 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 from 25% to the full amount starting in April. The aim was to ease the burden on refiners struggling to import Middle Eastern crude. As a result, imports of Canadian crude, as well as U.S. crude, surged from 5,780,000 barrels in March to 16,760,000 barrels in April.