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South Korean Refiners May Rekindle US Crude Appetite

South Korean Refiners are aiming to revive the U.S. crude oil purchases over the upcoming trading cycles. The major Middle Eastern suppliers maintain a strong discipline of production levels. They are continuing to raise their official selling prices, leading the South Koreans to take this decision. Despite domestic transportation, fuel demand is expected to improve due to the mass vaccination program’s launch.

8.69 million barrels of crude were imported from the U.S. in February, which is lower by 28.6% from the previous year. However, the shipments were up 60.2% from 5.43 million barrels that were received in January. This placed the North American producer on the second-highest position of the suppliers’ list for this month, state-run Korea National Oil Corp.

The crude supplies from the Middle East remain tight, while the major OPEC producers, including UAE, Kuwait, Iraq, and Saudi Arabia, have consistently raised the official selling prices. This has prompted many South Korean Refiners to tap into the North American market for top-up spot barrels.

A crude oil and condensate procurement manager at a major South Korean Refiners said, “Depending on OPEC’s production cut strategy for the second quarter, while also considering the uptrend in Middle Eastern official selling prices, South Korea may import at least three VLCCs, or around 6 million barrels, of U.S. crude on average per month over Q2 and Q3.”

South Korea has been reluctant to buy high volumes of the light and middle distillate-rich refinery feedstock. The domestic demand for gasoline, diesel, and jet fuel led to this.

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