Saudi oil share in South Korea falls below 30 pc for first time

Conflict puts pressure on Saudi crude exports amid Strait of Hormuz closure fears.

Seoul: Saudi Arabian crude oil accounted for less than 30 per cent of South Korea’s crude imports this year, industry data showed on Monday, October 5, amid efforts by local refiners to diversify their sources of crude following geopolitical risks in the Middle East.

According to the data from the Korea National Oil Corp. and the Korea Petroleum Association, Saudi crude accounted for 29.9 percent of the country’s total crude oil imports in the January-August period, down from 30.91 percent in the previous month.

It marked the first time in five years that the share fell below the 30 percent mark. Saudi Arabia remains South Korea’s largest source of crude oil, reports Yonhap news agency.

The annual share of Saudi crude last fell below the 30 percent level in 2021, when global crude oil supplies were disrupted amid heightened tensions in the Middle East and the COVID-19 pandemic.

If the downward trend continues, Saudi Arabia’s share could fall to third place or lower this year, potentially surpassing the previous low recorded in 1986, according to industry officials.

The decline is seen as reflecting efforts by South Korean refiners to diversify their crude oil supply sources and reduce their reliance on Middle Eastern crude amid growing geopolitical risks in the region.

Saudi Arabia has faced disruptions to crude oil supplies and exports as the conflict in the Middle East has affected oil facilities and raised concerns over a closure of the Strait of Hormuz.

Although Saudi Arabia has continued exports by using alternative routes around the Red Sea, shipments have come under further pressure as Houthi rebels have threatened shipping in the region.

South Korean refiners have consequently increased imports from other regions, particularly the United States.

U.S. crude accounted for 20.12 percent of South Korea’s total imports in the eight-month period, remaining above 20 percent after surpassing the 20 percent mark on a cumulative basis for the first time in January-April period.