SEOUL: South Korea is increasingly bringing in African crude oil, as its prices have become more attractive due to competition with shale gas, refiners here said. Seoul imported 9.6 million barrels of African crude oil and “condensate,” a type of ultra-light crude, in the first quarter of this year.
Annual imports of African oil have been on a steady increase in recent years, rising to 25.3 million barrels in 2014 and 26.69 million barrels in 2015 after bottoming out at 2.77 million barrels in 2011. At the current pace, this year’s annual import volume may top 40 million barrels for the first time in a decade.
African oil is relatively expensive, a reason that South Korea has traditionally depended on the Middle East for crude oil supplies. But South Korea has stepped up efforts to diversify its oil imports amid repeated geopolitical crises in the Middle East and in search of high-quality crude. Among local refiners keenly interested in African oil imports are SK Innovation Co. and GS Caltex Corp.
In particular, SK’s shipments of African oil accounted for 54.5 percent of total imports from the continent by South Korea in the first three months this year. “U.S. crude oil production has increased from last year, leading to a drop in its oil imports. As a result, the price of African crude oil has relatively declined,” an SK official said. African oil producers have also been forced to discount their oil due to growing demand for shale gas. South Korea’s imports of African oil soared to 100 million barrels a year in the late 1990s but dropped to 2.77 million barrels in 2011.