Donald Trump, the president-elect of the United States, is scheduled to be inaugurated on the 20th, amid reports that South Korea's imports of U.S. crude oil reached record highs last year.
According to the Ministry of Trade, Industry and Energy and the Korea International Trade Association on the 19th, among the 137 million tons (t) of crude oil imported by South Korea last year, U.S. crude accounted for 21.51 million tons, making it the second largest after Saudi Arabia, which imported 47.89 million tons.
The proportion of U.S. crude oil in South Korea's total crude imports also reached an all-time high of 15.7%. Before the inception of Trump's first term in 2016, the share of U.S. crude oil imports was only 0.2%.
The share of imported U.S. crude oil and gas steadily increased during Trump's first term (2017-2021). The U.S. has risen to become South Korea's second-largest source of crude imports, surpassing the United Arab Emirates and Iraq.
The import volumes and shares of U.S. natural gas to South Korea are also on the rise. Last year, South Korea ranked fourth among countries importing U.S. natural gas, following Australia, Qatar, and Malaysia.
While the share of U.S. natural gas in South Korea's imports was just 0.1% in 2016, it quickly surged to 18.5% by 2021. Since 2022, the U.S. share has slightly decreased but remains above 10%.
Markets anticipate that, according to Trump's pledge for 'cheap energy,' U.S. energy prices will decline. The South Korean government emphasizes that the country is expanding its imports of U.S. energy, a key export item for the U.S., and is considering ways to alleviate trade pressure from the U.S. by encouraging additional purchases of U.S. energy in both the public and private sectors.
The president-elect has previously stated that he would promote an increase in shale gas production to achieve 'cheap energy.' Chris Wright, the nominee for Secretary of Energy who will oversee energy policy in the Trump administration, also emphasized during the Senate confirmation hearing on the 15th (local time) that 'the most important thing is to expand the supply of affordable, reliable, and safe U.S. energy,' stating that 'energy production should be expanded, including commercial nuclear energy and liquefied natural gas (LNG).'
The government believes that the current political situation in the U.S. will create a favorable environment for South Korea. South Korea ranks as the eighth largest trade deficit country with the U.S., following China, Mexico, Vietnam, Germany, Ireland, Taiwan, and Japan.
According to the Ministry of Trade, Industry and Energy, South Korea's exports to the U.S. last year amounted to $127.8 billion, a 10.5% increase compared to the previous year, marking a record high. During the same period, the trade balance also recorded its highest level at $55.7 billion.
If energy prices decline as promised by the president-elect, South Korea is expected to increase crude oil imports to alleviate trade pressure with the U.S. Last year, the prices of crude oil and natural gas imported from the U.S. reached $17.3 billion (about 25 trillion won).
At the public level, there is a possibility that the Korea Gas Corporation will enter into additional long-term contracts for U.S. natural gas. The corporation is currently progressing with additional long-term contract bids related to import volumes after 2028. Reports suggest that both Qatar and U.S. corporations are participating in the bids.
The Korea National Oil Corporation is reportedly pushing for a plan to convert some of its strategic reserves from heavy crude to light crude oil. Given that U.S. crude oil is primarily light, there are interpretations that the government is looking to expand its imports of U.S. crude oil.
Park Seong-taek, the first vice minister of the Ministry of Trade, Industry and Energy, stated during a New Year's briefing on the 8th that '(after the Trump administration begins) there will likely be an increased reliance on fossil fuels, and shale gas development is expected to gain momentum,' adding that 'there will be effects on improving the competitiveness of importing U.S. gas and oil from the perspective of our energy corporations.' He further predicted that 'the effects of expanding U.S. energy imports will naturally emerge in the market, just like during Trump's first term.'