South Korea became the second buyer of U.S. oil after Canada last year as a kind of trade-off to avoid friction with the United State as well as for diversification of fuel sourcing amid volatility in Middle East crude.
According to Standard & Poor’s Global Platts, an energy and commodities information provider, Tuesday based on data from the U.S. Energy Information Agency (EIA), South Korea was registered as the second largest buyer of U.S. oil in 2018 with its daily imports averaging 236,000 barrels, following Canada with 378,000 barrels per day. China ranked third with imports of 228,000 barrels per day.
The nation’s imports of U.S. crude oil particularly surged in December last year. It imported 558,000 barrels of oil from America per day, far greater than the daily average of 351,000 barrels in the previous month and 50,000 barrels in the same month in 2017. The amount even exceeded Canada’s daily average imports of 431,000 barrels in December last year.
Cheaper U.S. oil prices contributed to the surge in Korean imports. Costs of U.S. oil have been on a steady decline thanks to the increased shale production, while prices of oil from the Middle East rose due to the U.S. sanctions against Iran. The price gap between Dubai crude and West Texas Intermediate (WTI) widened to $8 per barrel in December from the previous $2 to $3.
Another factor was China`s decreasing imports of American oil amid the ongoing trade conflict between the two countries, according to market watchers. Beijing’s imports of U.S. crude oil have been significantly cut down since June last year when it peaked at 510,000 barrels per day. Amid the intensified trade war, China didn’t bring in any U.S. oil in October and December last year and January this year, according to the Korea Energy Economics Institute.
By Choi Mira
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