South Korea secures 88% of May crude needs from balanced mix of supply sources

South Korea secured close to 90% of its monthly crude oil requirements in May amid the Middle East conflict, as the refining sector successfully procured many sour crude cargoes via the Red Sea and Gulf of Oman routes, along with supply from a wide range of sources in the Americas, Africa and the Mediterranean markets, according to multiple government ministries, state-run Korea National Oil Corp. and refining sources over June 26-29.

Asia’s third-largest crude buyer imported 39.42 million barrels of crude from Middle Eastern suppliers in May, a 32% decline from the previous year. Several VLCCs and Suezmax tankers failed to load or deliver medium and heavy sour Middle Eastern grades on schedule due to the outbreak of war in the region, feedstock managers at three major refiners based in Ulsan, Seosan and Seoul said, citing the latest data from KNOC, issued June 26

However, the refining sector secured a total of 72.82 million barrels of crude feedstock in May, equivalent to 87.7% of the five-year average monthly intake of 83.05 million barrels, supported mainly by Abu Dhabi and Saudi Arabian crude shipments that bypassed the Strait of Hormuz, along with strong US crude imports and increased shipments from Africa, according to KNOC data.

The major achievement for South Korea’s refining industry during the difficult period was the successful procurement of ample light and medium sour crude grades via the Red Sea and Fujairah–Gulf of Oman shipping routes that avoid the Strait of Hormuz, feedstock managers at two South Korean refiners based in Ulsan and Seosan, including S-Oil, as well as a trading manager at another major South Korean refiner’s trading office based in Singapore told Platts during market discussion and engagement sessions over June 26-28.

Looking ahead, South Korean refiners are preparing to reorganize their Middle Eastern crude procurement plans for the third and fourth quarters, as expectations grow that US-Iran peace talks could normalize Persian Gulf tanker flows.

At the same time, South Korea is expected to continue widening its crude supply base beyond the Middle East, with Canadian heavy sour crude emerging as a key component of the country’s diversification strategy, refinery feedstock managers said.

Korea Customs Service Commissioner Lee Jong-wook and Alberta Energy and Minerals Minister Brian Jean visited SK Innovation’s Ulsan Complex on June 19, following an April customs cooperation agreement that streamlines proof-of-origin documentation and allows South Korean refiners to apply a preferential 0% tariff under the Korea-Canada Free Trade Agreement, down from the standard 3% duty.

The customs measure is already supporting stronger Canadian crude flows, with South Korea importing 5.07 million barrels from Canada in the first five months, more than four times the 1.12 million barrels received a year earlier, KNOC data showed.

South Korea aims to raise imports of Canadian crude to as much as 16 million barrels in 2026, more than tripling from 4.88 million barrels in 2025, and will also explore increasing volumes further to 20 million barrels/year over time.