Korean Refiners Diversify Crude Imports Amid Middle East Tensions
South Korean refiners are taking steps to diversify their crude oil imports due to renewed tensions in the Middle East. The risk of disruptions to oil shipments through the Strait of Hormuz has resurfaced amid U.S.-Iran tensions, while Yemen's Houthi movement has threatened shipping in the Red Sea.
SK innovation E&S Co. plans to import 300,000 barrels of condensate from Australia's Barossa gas field through the Port of Incheon early next month. This marks the first time a Korean private company has imported ultra-light crude produced from its own overseas resource development project.
The cargo is part of SK innovation E&S Co.'s annual entitlement of 1.1 million barrels from its stake in the Barossa project, which produces about 3 million barrels of condensate annually. The condensate will be processed at SK Incheon Petrochem Co.'s dedicated facility to produce naphtha, a key petrochemical feedstock, as well as gasoline, jet fuel, and paraxylene.
Other refiners are also broadening their sourcing. GS Caltex Corp. imported 110,000 barrels of crude oil from Venezuela last month and is evaluating the refining economics of the supply. Hanwha TotalEnergies Petrochemical Co. also imported 700,000 barrels of Norwegian crude last month for processing at its condensate refinery in Daesan.
Korea's import mix has shifted to reflect these efforts. Crude imports last month consisted of 59.7 percent from the Middle East, 25.6 percent from North America, 6.9 percent each from Asia and Africa, and 1 percent from Europe.