South Korea’s oil refiners logged increase in exports amid rebounding global demand. The combined shipments of oil and petroleum products by SK Energy Co., GS Caltex Co. S-Oil Corp. and Hyundai Oilbank Co., stood at 111.8 million barrels in the July-September period, up 0.6% from a year earlier, according to a report by the Korea Petroleum Association that represents local refiners.
The total amount of shipments is valued at $9.03 billion in the period under review, surging 69.6% from a year earlier, the report showed, adding that this is the first time the exports have exceeded the $9 billion mark since the third quarter of 2019.
Oil demand has increased as major economies have started to gradually reopen their borders and
ease coronavirus-led mobility curbs.
Singapore — Asia’s key gasoline blending hub — was the biggest destination for South Korea’s oil exports in September, accounting for 14.3 percent, followed by the United States and China, both with 13 percent. China fell to third place as oil exports to the world’s second largest economy decreased in the wake of its imposition of tax on light cycle oil, or LCO, Japan was fourth, accounting for 12.1 percent and Australia was next with 9.6 percent.
By product, diesel took up 40% of the exports, gasoline accounted for 23%, followed by aviation fuel at 17% and naphtha at 8%.
South Korean refiners exported 5.46 million barrels of gasoline to Singapore in the third quarter, more than double the 2.39 million barrels shipped a year earlier, Platts reported citing an official at the Korea Petroleum Association.
In response to Beijing’s surprise imposition in June of an increased consumption tax on imports of light cycle oil, Korean refiners focused their exports drive on Singapore, and this strategy is working, resulting in hikes in gasoline shipments, according to the official.
South Korea has a small amount of domestic oil reserves, but the country relies almost entirely on crude oil imports to meet its demand. Nearly all of South Korea’s total petroleum and other liquids production of 119,000 barrels per day (b/d) in 2019 was from refinery processing gains, non-conventional liquids, and biofuels production, according to EIA.
Through acquisitions of overseas companies and investments with major international and national oil companies, the Korea National Oil Corporation (KNOC) produced 125,000 b/d of oil and about 124 billion cubic feet of natural gas in 2019 in its overseas operations. As of March 2020, KNOC had invested in 20 producing blocks and had seven fields under development or exploration in several countries, EIA data showed.
