Page 8 - NorthAmOil Annual Review 2021
P. 8
NorthAmOil PERFORMANCE NorthAmOil
South Korean imports
of US crude likely to
increase in 2022
US-SOUTH HAVING imported in excess of 120mn barrels
KOREA of US crude in 2021, analysts are expecting more
of the same from South Korea throughout 2022.
Already the biggest importer of US crude on
the Asian continent, Seoul’s forecast preference
for American oil is being attributed to a com-
bination of OPEC supply issues, and cheaper
prices for better quality sweet crudes when com-
pared to Middle East produced crude.
US producers already rank number two on
South Korea’s leading suppliers’ list for the Jan-
uary to November 2021 period, with 113mn
barrels imported, 11.6mn barrels of these in
November alone, which marked an increase
of almost 77% on figures posted in November,
2020 and 16.8% up on October imports, accord-
ing to the government-owned Korea National
Oil Corporation (KNOC).
Added to four confirmed arrivals of very large
crude carriers (VLCCs) on the Korean penin-
sula in December, the total figure for the year
is expected to be approaching 121mn barrels
imported over the 12-month period, with a
minimum figure of 120mn.
Total imports for US crude up to the end of
2020, when South Korea was one of the coun-
tries worst affected by coronavirus (COVID- Iraq, the United Arab Emirates and Qatar mean-
19), stood at 104.4mn barrels. while all posted figures for the year in the 50mn
US producers offering highly flexible large- barrel range, as did Russia and Mexico.
scale spot purchases is a significant factor South Speaking to financial analytics firm S&P
Korean refineries are keen to take advantage Global earlier in the week, one South Korean
US producers of, according to the country’s Petroleum Asso- crude strategist said: “The major Middle East-
ciation in a statement made over the holiday ern producers couldn’t give us a straight answer
already rank period. The majority of US crude purchases when asked about minimum and maximum
number two on since 2016 have come in the form of spot buys. term supply volumes they could offer, because
In comparison, well over 60% of South Korea’s the OPEC members are also struggling to assess
South Korea’s total Middle East purchases of crude in the same the global demand recovery outlook and their
period have come about as part of fixed-term own production hike strategy for 2022,” adding
leading suppliers’ deals. that as a result, “end users are (therefore) gener-
Throughout 2021, however, in response to ally cautious not to over-commit to fixed-term
list for the ongoing OPEC uncertainty over production deals because another wave of major setbacks in
January to levels, orders placed by Seoul with leading pro- global demand would lead to a massive stock-
pile of unwanted crude oil.”
ducers in the Middle East started to drop off.
Saudi Arabia, the leading Middle Eastern
OPEC is currently standing behind a limited
November 2021 nation exporting to South Korea, shipped increase in output quotas of 400,000 barrels per
period. 256mn barrels in the January to November 2021 day (bpd) each calendar month, although this
period, a figure down over 13% on the same is seen as too little by many Asian refiners, with
period in 2020. some asking for an increase in output of twice
No other nation from the Middle East cleared as much; a point alluded to by the same strat-
the 120mn barrel mark set by US crude imports, egist saying: “Meanwhile, if OPEC decides to
with the 18.1% year-on-year drop in numbers continue keeping a tight supply strategy, South
posted for Kuwaiti imports to Korea totalling Korean refiners could take extra VLCCs from
113mn barrels, according to the KNOC. the US thanks to their extensive supply and
Fellow Middle Eastern South Korea exporters trading network.”
P8 www. NEWSBASE .com Week 01 06•January•2022
