April 3, 2023 [Argus] – South Korea’s crude imports rose in February as refinery operating rates hit seven-month highs.
South Korea imported 3.113mn b/d of crude in February, up by 18.2pc from January and up by nearly 10pc from February 2022, according to data from state-owned KNOC.
South Korean refiners operated at 81.3pc of capacity in February, the highest rate since August 2022. Refinery operating rates were 78.6pc in January.
Imports of Mideast Gulf crude rose by 11.3pc on the month to 2.219mn b/d in February, as the country increased its reliance on the region’s supplies. Mideast Gulf crude made up 71pc of South Korea’s total crude imports in February, up slightly from 68pc in January.
Crude imports from the UAE saw the largest increase, surging by 90pc from January. South Korea imported more volumes of Abu Dhabi medium sour Upper Zakum and light sour Murban and Umm Lulu crudes in February, according to data from Vortexa. Abu Dhabi’s official crude prices fell for January loading cargoes which may have spurred the higher imports, as these volumes will mostly arrive in South Korea in February.
But South Korea cut imports of US crude in February, which fell by around 23pc on the month to 399,000 b/d. South Korea buys mainly light sweet WTI and WTL grades from the US, but prices of WTI crude for cargoes delivered to South Korea in February had been above the prices for February-delivery Murban, which likely led refiners to trim their purchases in favour of Murban.
South Korea did not import any European crude in February for the fourth consecutive month. Exports of North Sea crude in January had gone mainly to refiners in Mediterranean partly as replacement for Russian crude.
South Korea increased its crude imports from Kazakhstan by a third in February. The long-haul economics of moving Kazakhstan’s CPC blend crude to Asia-Pacific had improved late last year, because of a narrower Brent premium to Mideast Gulf benchmark Dubai crude.
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