Korea Reduces Reliance on Saudi Crude Amid Geopolitical Risks

Korean refiners are shifting their crude oil supply sources, reducing their reliance on Saudi Arabia amid rising geopolitical risks in the Middle East. Data from the Korea National Oil Corporation and the Korea Petroleum Association reveals that Saudi crude accounted for just 29.9% of Korea's total crude imports from January to August this year, down from 30.91% in the first seven months. This marks the first time in five years that Saudi Arabia's share has fallen below the 30% threshold.

The decline reflects broader efforts by Korean refiners to diversify their supply chains. Saudi Arabia remains Korea's largest crude supplier, but industry officials warn that if the trend continues, its share could drop to third place or lower by the end of the year. The last time Saudi crude fell below 30% was in 2021, when global supplies were disrupted due to Middle East tensions and the Covid-19 pandemic.

Geopolitical risks, including conflicts affecting oil facilities and threats to shipping routes like the Strait of Hormuz, have prompted Korean refiners to seek alternative sources. U.S. crude has emerged as a key alternative, accounting for 20.12% of Korea's total imports in the eight-month period. This is the first time since the January-to-April period that U.S. crude has surpassed the 20% mark on a cumulative basis.