South Korea’s SK Energy ramps up US crude imports

SEOUL / Reuters

South Korea’s SK Energy has bought 6.5 million barrels of US crude to be delivered between November and January, a company spokeswoman said on Monday, as the country’s top oil refiner steps up imports of the competitively priced oil.
The ramp-up in imports comes as US crude oil prices have dropped against Brent and Dubai , the benchmarks for Atlantic Basin and Middle East crude, making American oil attractive for
Korean refiners.
“We have kept buying US crude since we made our first purchase of it, almost 2 million barrels every month because we found the economics of US crude are good,” said Kim Woo-kyung, a spokeswoman at SK Innovation, which owns SK Energy.
The purchases help refiners reduce their heavy dependence on Middle East crude and also allows buyers to secure spot supplies when needed as US crude is freely traded, said Lee Dal-seok, senior research fellow at Korea Energy Economics
Institute, a state-run think tank.
The ability to load US crude with Latin American supplies also improves freight economics, he said. SK Energy has chartered four Very Large Crude Carriers (VLCCs) to load US and Mexican crude that will be delivered between November and January, according to trade and shipping sources and data on Thomson Reuters Eikon.
Two of these VLCCs – Gener8 Strength and Dalian – will arrive in Ulsan in November. Supertanker Gener8 Strength is carrying 2 million barrels of Mexican crude and US crude, while VLCC Dalian has 2 million barrels of US crude onboard, the sources said.
SK Energy has also bought 500,000 barrels of Mexican crude and 1.5 million barrels of US crude, which will be loaded later this month onto VLCC Amphitrite and arrive in December, one of the sources said.