South Korea's crude oil imports rose for the third consecutive month in June amid a robust economic recovery, but a new wave of COVID-19 cases could put immediate brakes on the momentum, while refiners' growing focus on hydrogen may kick off a long-term downtrend in crude purchases.
Еще не зарегистрированы?
Получайте ежедневные электронные уведомления и заметки для подписчиков и персонализируйте свои материалы.Зарегистрироваться сейчас
The world's fifth-biggest crude importer received 80.165 million barrels, or 2.67 million b/d, in June, up 7.4% from 74.659 million barrels a year earlier, showed latest data from state-run Korea National Oil Corp.
The country's refinery feedstock requirements and fuel demand increased in the second quarter as broad economic activity, including manufacturing, construction, goods and services exports and domestic travel, picked up rapidly following the rollout of a nationwide COVID-19 vaccination program in late February.
The Bank of Korea had raised May 27 the country's 2021 economic growth forecast to 4% from a 3% growth projection made in February.
However, the recent spike in infections would likely dampen the country's oil demand in the third quarter and early fourth quarter, potentially leading to low refinery runs and cuts in crude and condensate imports, an official at KNOC said.
South Korea has recorded a surge in infections over the past several weeks, with daily confirmed cases reaching a record high 1,842 on July 22. The Seoul metropolitan area has been under the strictest restrictions of the country's four-tier social distancing system since July 12, placing severe constraints on small businesses and population mobility.
Reflecting the downbeat consumer fuel demand outlook, the country's crude imports in the second half could be capped at 2.5 million b/d compared with 2.59 million b/d imported in the first half, according to feedstock managers at three major South Korean refiners and market research analysts at Korea Petroleum Association surveyed by S&P Global Platts.
In addition, four major refiners SK Energy, Hyundai Oilbank, S-Oil and GS Caltex will gradually shift focus from middle distillate production to clean energy fuels including hydrogen, paving the way for South Korea to slowly but gradually cut back on crude oil imports while raising natural gas purchases over the coming years, refinery officials told Platts.
Earlier this month, Hyundai Oilbank said it plans to reduce its mainstream refining business to 45% of total revenue by 2030 from 85% currently. Hyundai Oilbank has set a goal to produce 100,000 mt/year of blue hydrogen -- produced from fossil fuels with emissions captured -- by 2025.
In May, GS Caltex signed a memorandum of understanding with state-run Korea Gas Corp., or KOGAS, to build a liquid hydrogen factory.
KOGAS and GS Caltex would extract hydrogen from LNG and supply liquid hydrogen to charging stations. It would be the first use of waste cold energy from LNG regasification to liquefy hydrogen, KOGAS had said.
Top June crude suppliers
South Korea's crude imports from top supplier Saudi Arabia dropped 20.6% year on year to 22.911 million barrels in June, including 942,000 barrels from the Saudi-Kuwaiti Neutral Zone. It marks the fourth consecutive month of year-on-year decline since March.
However, the country received 11.377 million barrels from its second biggest supplier US in June, more than double the 5.033 million barrels received in the same month last year, the KNOC data showed.
This marked the biggest monthly US crude shipments since April last year. It also marked the third consecutive month of year-on-year increase after falling for 12 months in a row.
South Korea's crude imports from Kuwait dropped 40.3% year on year to 7.783 million barrels in June, while imports from the UAE also fell 32.2% year on year to 4.495 million barrels last month.
Crude imports from Australia almost doubled to 1.325 million barrels in June, compared with 682,000 barrels in the same month last year. South Korean refiners and petrochemical makers have been making rigorous efforts to secure ample supply of condensate, or ultra-light crude, from Australia and elsewhere to produce polypropylene and polyethylene, which are essential for making general plastic-based medical devices.
South Korea's top 10 crude suppliers:
(Unit: '000 barrels)
South Korea's oil products exports:
(Unit: '000 barrels)
*Total include other suppliers
Source: Korea National Oil Corp.
37th Asia Pacific Petroleum Conference (APPEC 2021) | September 27-29, 2021
APPEC 2021 is Platts Asia's first hybrid event, featuring more than 100 speakers from over 20 countries, with a single platform for global delegates and exclusive sessions with top decision makers. Tune in as we shape and map the future of energy as an APPEC community.View agenda