in Oil & Companies News 15/02/2016
South Korea’s reliance on Middle Eastern crudes fell in 2015 as refiners turned to Russian and Mexican cargoes that were plentiful, but an anticipated rise in purchases from Iran may halt the downslide this year.
The country’s four refiners imported 741.78 million barrels from the Middle East in 2015, up 3.1% from 719.3 million barrels in 2014, according to data from state-owned Korea National Oil Corp. complied by Platts.
Although crude imports from the Middle East rose 3.1%, the market share fell as overall imports grew at a much faster rate of 5.8%, rising to 877.19 million barrels in 2015 from 829.24 million barrels in 2014.
As a result, the share of Middle Eastern crudes fell to 84.6% in 2015, from 86.7% in 2014.
“The refiners’ reliance on Middle Eastern crudes fell last year as they imported more volumes from Russia and Mexico as part of the efforts to diversify crude supply sources,” a KNOC official said.
“The refiners also increased spot crude purchases on the back of abundant global supply, resulting in more volumes from regions other than the Middle East,” he said.
The refiners’ imports of Russian crude jumped 26.7% to 43.7 million barrels in 2015, from 34.48 million barrels in 2014. South Korea paid an average of $53.90/barrel for Russian crude, lower than the $55.20/b for UAE oil and $56.50/b for Qatari grades, KNOC said.
In addition, South Korean refiners imported 13.89 million barrels of crude from Mexico last year — the first by South Korean refiners since 1992.
The KNOC official said South Korean refiners’ reliance on Middle Eastern crude was unlikely to decline sharply in 2016 despite their efforts to diversify supply sources.
“South Korean refiners’ facilities are fit for grades from the Middle East, which means refiners cannot significantly reduce their reliance on Middle Eastern crude,” the official said.
As South Korean refiners are expected to step up imports from Iran following the lifting of the sanctions, the region’s market share would remain relatively high — over 80% — in coming years, the official added.
SK ENERGY, GS CALTEX
The country’s top refiner SK Energy imported 204.72 million barrels from the Middle East in 2015, up 10.5% from 185.24 million barrels in 2014.
But its share of the total imports fell to 75.8% in 2015 from 77.5% in 2014 as its total crude imports rose 13% to 269.94 million barrels, from 238.91 million barrels in 2014.
SK Energy’s imports from Iran dropped 38.4% to 18.83 million barrels last year, from 30.59 million barrels in 2014.
SK Energy officials said the refiner would seek to lift imports from Iran following the lifting of the sanctions.
The refiner’s crude imports from Iraq soared more than three times to 30.86 million barrels in 2015 from 10.16 million barrels in 2014 on lower prices.
South Korean importers paid an average of $49.40/b for Iraqi crude, lower than $53.70/b for Saudi Arabia and $50.70/b for Kuwaiti grades.
Its imports from the UK also rose 161% to 13.18 million barrels last year, from 5.05 million barrels in 2014 as it increased spot purchases of North Sea Forties crude, according to the KNOC official.
SK Energy also imported 3.95 million barrels of Mexican crude last year, compared with none in 2014.
But its imports from Africa declined 10.4% to 9.28 million barrels in 2015, from 10.39 million barrels in the previous year.
Imports of Asian crudes also fell 23.9% to 13.38 million barrels in 2015, from 17.58 million barrels a year earlier.
The second-biggest refiner GS Caltex imported 221.95 million barrels of Middle Eastern crude oil last year, up 7.7% from 206.08 million barrels in 2014. But the share of Middle Eastern crudes declined to 82.3% in 2015 from 83.8% in 2014.
Its imports of Iraqi crude jumped 54.1% to 77.82 million barrels in 2015, from 50.5 million barrels in 2014. GS Caltex’s imports of Russian crude rose 6.9% to 14.8 million barrels from 13.84 million barrels in the previous year.
HYUNDAI OILBANK
Hyundai Oilbank imported 101.63 million barrels of Middle Eastern crude in 2015, down 5.6% from 107.62 million barrels in the previous year. Its share also fell to 81.8% last year, from 89.1% in 2014.
The refiner’s crude imports from Iran increased 8.1% to 15.49 million barrels in 2015, from 14.33 million barrels in 2014, while those from Iraq more than doubled to 17.55 million barrels from 8.16 million barrels in 2014.
Hyundai Oilbank imported 3.46 million barrels of Russian crude last year, compared with none in 2014, while its crude imports from the Americas more than doubled to 14.67 million barrels last year, from 6.21 million barrels in 2014, driven by 9.93 million barrels from Mexico.
S-Oil Corp. imported 213.48 million barrels of Middle Eastern crude in 2015, down 3.1% from 220.37 million barrels in the previous year.
S-Oil, which is 63.4% owned by Aramco Overseas Co., a subsidiary of Saudi Aramco, imports most of its crude oil from Saudi Arabia and only small volumes from Qatar.
SK Innovation’s petrochemical subsidiary, SK Global Chemical, as well as Hanwha Total Petrochemical, also imported small volumes of crude oil, but the exact volumes were not available.
