Saudi Arabia remains South Korea’s top oil supplier after Iran sanctions

South Korea has bought 209,316 barrels of oil for the first eight months of this year. (AFP)
Updated 10 October 2019

Saudi Arabia remains South Korea’s top oil supplier after Iran sanctions

  • In July, Seoul’s crude shipments from the US almost tripled to 14,782 barrels from the year before

SEOUL: Saudi Arabia remains the largest crude supplier for South Korea in the absence of Iranian oil shipments, according to customs data. 

South Korea’s oil imports from Iran were halted after the US re-imposed sanctions against the Islamic republic in May.

The statistics, released by the Korea National Oil Corporation, show that South Korea bought a total of 209,316 barrels for the first eight months of this year, representing a 7.4 percent increase from a year earlier.

The US has seen an increase in its oil supply to South Korea. The data shows South Korea imported 51 percent more crude from the US.

In July, Seoul’s crude shipments from the US, in particular, almost tripled to 14,782 barrels from the year before.

As a result, the US became South Korea’s second-largest crude oil supplier, overtaking Kuwait for the first time. Over the past eight months, South Korea has imported a total of 86,069 barrels, with the price tag of nearly $5.7 billion.

South Korea’s crude imports from Kazakhstan jumped by 39 percent from the previous year, followed by the UAE, Kuwait and Saudi Arabia. Oil imports from the UAE increased by 33.7 percent, and Kuwait by 13.8 percent.

South Korean oil refiners have been struggling to find alternative sources of condensate supply. Previously, the Iranian ultra-light oil was favored most by South Korean refiners as a raw material for making petrochemical products.

Before US sanctions were re-imposed, South Korea was the biggest buyer of Iranian condensate with a rich yield of naphtha. 

Hanwha Total Petrochemical is the first South Korean refiner to diversify its source of condensate out of Iran.

According to the company spokesman, the petrochemical firm has ordered 500,000 barrels of condensate from Saudi Arabia.

“The Saudi Arabian condensate was delivered in August, and this is our efforts to diversify the sources of condensate imports,” the spokesman said, asking not to be named. 

Hanwha Total operates a condensate splitter at its factory in South Chungcheong Province to deal with 180,000 barrels of condensate a day, he added.

Earlier, the company said it would increase imports of condensate from Australia and Russia.

Other refiners such as SK Innovation were not immediately available for comment.

In an effort to help local refiners find alternative oil supplies, the South Korean government plans to extend freight rebates for shipments of non-Middle East crude to the end of 2021, according to the Ministry of Trade, Industry and Energy.


Malaysia to study impact of India’s planned trade action

A truck carrying oil palm fruits passes through Felda Sahabat plantation in Lahad Datu in Malaysia's state of Sabah on Borneo island, February 20, 2013. (REUTERS)
Updated 14 October 2019

Malaysia to study impact of India’s planned trade action

  • Malaysia’s key imports from India include petroleum products, live animals and meats, metals, chemicals and chemical products

KUALA LUMPUR: Malaysia’s Prime Minister Mahathir Mohamad said his government will monitor the trade situation with India, which is reported to be considering trade curbs on the Southeast Asian nation over his criticism of actions in Kashmir, news wire Bernama reported.
Government and industry sources told Reuters last week that New Delhi is looking for ways to limit palm oil imports and other goods from Malaysia, in retaliation for Mahathir’s speech at the United Nations in September when he said India had “invaded and occupied” Jammu and Kashmir. Malaysia had said it did not receive “anything official” from India.
Mahathir said on Sunday his government will “study the impact of the action taken by India,” the government-owned Bernama said.
“They are exporting goods to Malaysia too. It’s not just one-way trade, it’s two-way trade,” Mahathir was quoted as saying in the report.
India is the world’s biggest importer of edible oils, and is the biggest buyer of Malaysian palm oil. It bought 3.9 million tons of Malaysian palm oil in the first nine months of 2019, according to data compiled by the Malaysian Palm Oil Board.
Malaysia’s key imports from India include petroleum products, live animals and meats, metals, chemicals and chemical products.