South Korea imported 270.4 million barrels of crude in the third quarter, up 3.9 percent on the year, as it took the opportunity of lower prices from Middle Eastern exporters vying for market share in Asia. The country is the world's fifth largest crude oil importer.
Among producers, Iran was the biggest beneficiary of this increased Korean consumption, with imports from it skyrocketing by 147.7 percent on Q3 2015 to 29.8 million barrels. The total imports from the Middle East for the period were up 15.8 percent to 239.2 million barrels. According to the EIA, as of 2014, Saudi Arabia was the biggest exporter to South Korea, accounting for a third of its oil imports, but this may be starting to change with Iran back in the game.
South Korea embraced Iran's return to international markets earlier this year with a historical visit by President Park Geun-hye in Tehran. At the time, analysts warned that such an openly expressed cheer could jeopardize Korea's standing with Saudi Arabia, but since May when the visit took place, a lot of things have happened, and now it is a much bigger concern for Saudi Arabia to maintain its good standing with its Asian clients than the other way around.
Earlier today Reuters reported that big Asian buyers are stocking up on non-OPEC oil - from the U.S., the North Sea, and Azerbaijan, besides Russia - and are likely to continue to do so if OPEC agrees on a production cap and its prices become steeper.
Related: Can An OPEC Deal Save Venezuelan Oil From Total Collapse?
South Korea seems eager to do business with Iran, despite grave warnings that an outsider to the Middle East should balance between the two biggest powers in the region without showing preference to either of them. Yet, during that May visit, the two sides signed a stunning 66 memoranda of understanding, which, if they were followed by full contracts, would be worth around US$37 billion.
Right now, this is highly uncertain, as President Park Geun-hye is the target of wide-scale protests. The protestors accuse her of reinforcing the power of the big corporate conglomerates instead of curbing it as she promised before the 2012 election, which she won.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More