South Korea Triples Canadian Crude Imports Amid Middle East Supply Shifts

South Korea is taking steps to reduce its dependence on Middle Eastern crude oil, as the share of Saudi crude in its imports dropped below 30% for the first time since 2021. Data from Korea National Oil Corp. and the Korea Petroleum Association, reported by Yonhap, shows that Saudi crude accounted for just 29.9% of South Korea's total crude imports from January to August. This marks the first time since the COVID-19 pandemic that Saudi Arabia's share has fallen below 30%.

The shift comes as South Korean refiners seek alternative suppliers due to disruptions caused by the war in Iran, which led to the closure of the Strait of Hormuz. This closure stranded some Saudi shipments and caused oil and freight prices to spike. Diversification efforts have already increased the share of U.S. crude oil in South Korea's imports to over 20% since April.

In addition to turning to the U.S., South Korea has secured 273 million barrels of Middle Eastern and Kazakh crude that bypass the Strait of Hormuz. The country also agreed with Canada in June to triple its crude imports from Canada this year and boost liquefied natural gas (LNG) purchases from Canadian export projects in the coming years. Currently, South Korea imports 70% of its crude oil from Middle Eastern producers, most of which must pass through the Strait of Hormuz.

The country's industry ministry aims to cut reliance on Middle East crude imports to 50% by 2035. This strategic shift reflects South Korea's broader efforts to diversify its energy supply amid ongoing supply shocks in the Middle East.