South Korea Slashes Saudi Oil Imports to 5-Year Low as U.S. Crude Surges

South Korea's crude oil imports from Saudi Arabia, its traditional top supplier, have dropped below 30% for the first time in five years. Data from the Korea National Oil Corporation's Petronet and the Korea Petroleum Association shows that Saudi crude accounted for 29.90% of South Korea's total imports from January to August this year, down from 30.91% the previous month. The last time the annual Saudi share fell below 30% was in 2021, during the COVID-19 pandemic and U.S. sanctions on Iran.

The shift comes as South Korean refiners diversify their import sources due to persistent supply chain instability, including the prolonged Middle East war and the blockade of the Strait of Hormuz. Overall, Middle Eastern crude now represents just 61.8% of South Korea's imports, the lowest level in 40 years. The decline is attributed to supply-side disruptions, including attacks on Saudi crude production and export facilities, as well as threats from Houthi rebels in the Red Sea region.

Crude from the Americas, led by the United States, is filling the gap. U.S. crude imports reached 20.7% through April this year, surpassing the 20% threshold for the first time, and maintained 20.12% through August. The Americas as a whole, including Canada, Mexico, and Brazil, accounted for 26.7% of imports, an all-time high. Asian and African crude also saw increases, with shares rising to 5.9% and 5.6%, respectively.

Industry observers believe this change reflects a structural transformation in South Korea's crude oil supply. A refining industry official noted that the prolonged Middle East war has made supply instability a constant reality, prompting refiners to reduce dependence on any single region. While the Americas are filling the shortfall, Middle Eastern crude remains important for price competitiveness and refinery optimization, suggesting that diversification rather than complete replacement is the likely path forward.