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South Korea has been buying increasing amounts of U.S. crude oil and will continue to do so this year, Reuters reports, citing data from its service Eikon. This will help narrow the Asian economy’s trade surplus with the United States, improving moods in Washington and strengthening bilateral ties.
Over this month and next, for example, imports of U.S. crude oil and liquefied natural gas into South Korea are seen at 18 million barrels and 900,000 tons, respectively.
“At the moment, the trend (of importing U.S. crude) will stay ... The economics for U.S. crude is a little bit better than Middle East and North Sea oil,” Reuters quoted a source from the South Korean refining industry as saying.
Last year, according to Reuters data, the U.S. exported 7.87 million tons of crude oil to South Korea, equal to 57.687 million barrels, as well as 4.664 million tons of liquefied natural gas. The country, which is the world’s fourth-largest oil importer, was nevertheless granted a sanction waiver in November, allowing it to import a certain amount of Iranian crude.
South Korea, however, has been staying off Iranian crude for four months in a row as of December. Iranian oil exports to South Korea for full-2018 dived by more than 60 percent to 58.2 million barrels, according to the Korea National Oil Corp. data, from 147.87 million barrels a year earlier. At the same time, December imports of U.S. crude surged sixfold to 13.61 million barrels, S&P Global Platts reported earlier this month.
There were reports South Korea will resume Iranian imports this month or in February, which will leave it a narrow window to stock up on cheap Iranian crude before the sanction waivers expire. In the meantime, the U.S. has become the country’s sixth-largest supplier, overtaking Iran and Russia, and its third-largest LNG supplier. South Korea, for its part, became the U.S.’ largest LNG client last year.
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.