South Korean refiners faced with weak margins want to cut costs by diversifying away from their traditional crude suppliers in the Middle East, and US condensate could be an attractive option now that a long-standing US export ban has been eased.
South Korea has the fourth-largest refining capacity in Asia Pacific at 2.9 million barrels per day (bpd) but crude operating rates have been cut this year to cap refining losses, while secondary units that use much cheaper fuel have produced more.
According to Reuters, earlier this month the country's second-largest refiner, GS Caltex Corp, received the first cargo of ultra-light oil, or condensate, from the United States since the softening of the ban. Top refiner SK Energy Co Ltd is also expecting US condensate soon.
Seoul imported 612.5 million barrels of crude in the first eight months of this year, up just 0.2 percent from a year earlier, data from state-run Korean National Oil Corp showed.
Imports from the Middle East accounted for 84 percent of the total at 513.8 million barrels, down 0.8 percent from the same period last year. European cargoes rose 11 percent to 20.6 million barrels and shipments from Africa more than quadrupled to 16.2 million barrels.
Washington is facing growing pressure to ease its ban on crude oil exports, with South Korea and Mexico joining the European Union in pressing the case, but it has held back from issuing more export licences while the issue is debated by domestic producers and consumers.
