U.S. Crude Overtakes Saudi Arabia as South Korea's Refiners Accelerate Shift Away from Middle Eastern Oil

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[Financial News] South Korea's refining industry is rapidly moving away from a crude procurement structure heavily concentrated in the Middle East. Imports of U.S. crude have surpassed those from Saudi Arabia, while purchases of non-Middle Eastern crude from Australia, Brazil and other countries are also rising, signaling a broader diversification of supply sources.
According to the Korea National Oil Corporation (KNOC) on the 29th, South Korea imported a total of 64.498 million barrels of crude oil in April. Of that, 16.787 million barrels came from the United States, accounting for about 26% of the total. By country, that was the largest volume, exceeding Saudi Arabia's 15.946 million barrels.
The rise in U.S. crude imports has become even more pronounced this year. Imports from the United States reached 16.498 million barrels in January, 15.9 million in February and 17.209 million in March, before remaining at a high level in April.
Price competitiveness is also seen as a key factor behind the increase. In April, the average landed cost of U.S. crude was around $103 per barrel, lower than Saudi crude at $117. Industry officials say U.S. crude is gaining favor among domestic refiners because it offers both supply stability and competitive pricing.
Diversification beyond the Middle East was also notable. Imports of Australian crude rose to 3.676 million barrels in April, while 2.894 million barrels of Brazilian crude were brought in. Imports of Canadian crude also increased to 1.676 million barrels. Moves to secure new supply lines continued as well. Kazakhstan supplied 1.051 million barrels for the first time in April, and 258,000 barrels of crude arrived from Mozambique. Imports from African producers such as Equatorial Guinea and the Republic of the Congo also continued.
By contrast, reliance on traditional Middle Eastern suppliers is declining. Imports of Saudi crude fell from 33.591 million barrels in January to 15.946 million barrels in April. Imports from Kuwait also plunged to just 97,000 barrels in April.
Industry observers say geopolitical risks in the Middle East and supply chain instability are accelerating the diversification of import sources. Government support measures have also played a role. Since April, the Ministry of Trade, Industry and Energy has expanded the reimbursement coverage for freight cost differences applied to non-Middle Eastern crude imports from 25% to the full amount. The move is intended to ease the cost burden created by longer shipping distances compared with Middle Eastern crude and support diversification of supply sources.
The strategic oil swap system is also helping support the expansion of non-Middle Eastern crude imports. Under the scheme, when domestic refiners purchase crude overseas, the government first lends them strategic reserves, which are later repaid with the crude they secure. For refiners, this allows them to secure non-Middle Eastern crude that requires long-distance shipping more stably and broadens their options for crude grades.
An industry official said, "With the expansion of U.S. supply and government support measures, it has become possible to import a wider range of crude grades." The official added, "As geopolitical risks grow, the trend toward reducing dependence on specific regions will only strengthen."
solidkjy@fnnews.com Gu Ja-yun Reporter