South Korea’s imports of US crude fell for the sixth consecutive month in October as domestic refiners continued to favour cheaper Middle Eastern oil. According to customs data, South Korea imported 1.192 million tons (8.74 million barrels) of crude oil from the US, a year-on-year decline of 37%. For the first ten months of 2020, South Korea’s imports of US crude stood at 92.91 million barrels, falling by 17.5% from the same period in 2019.
In contrast, South Korea’s imports of Saudi crude stood at 4.08 million tons (29.91 million barrels) in October, rising by 32.6% year-on-year as Saudi Aramco lowered its official selling prices. South Korean refiners found that Middle Eastern grades with higher sulfur content were the most economical feedstock option amid weak consumer fuel demand and volatile refining margins.
Meanwhile, US WTI and Eagle Ford have relatively higher quality and yield more light and middle distillates. However, South Korean refiners were reluctant to purchase high volumes of such grades amid tepid demand for transportation fuels. At the same time, WTI became more expensive compared to Dubai-linked Persian Gulf grades. Data from state-run Korea National Oil Corp (KNOC) showed local buyers paid an average outright price of $53.91/barrel of US crude, compared to $43.82/barrel for Saudi shipments.
South Korea’s overall crude imports stood at 11.087 million tons (81.27 million barrels) last month, declining by 1.3% from a year earlier. According to customs data, the country imported 825.4 million barrels of crude in the January-October period, a year-on-year decline of 7.2%. KNOC data showed that South Korea’s oil stocks fell 11.3% year-on-year to 44.92 million barrels by the end of September.
