Over 6 million barrels of UAE crude to be imported by South Korea, media says

Over 6 million barrels of UAE crude to be imported by South Korea, media says

South Korea’s imports of United Arab Emirates (UAE) crude oil have surged significantly, with media reports indicating over 6 million barrels acquired in recent months. According to Korea National Oil Corporation (KNOC) data, South Korea imported 74.7 million barrels of UAE crude in the first half of 2024, a 47.5% year-on-year increase. This trend aligns with the country’s broader strategy to diversify energy sources amid geopolitical tensions in the Strait of Hormuz, a critical transit route for 20% of global crude oil and LNG.

The surge is partly attributed to the South Korea-UAE Free Trade Agreement (FTA), which eliminates a 3% tariff on UAE crude imports over the next decade. The agreement also reduces tariffs on naphtha trades, enhancing cost efficiency for refiners. South Korean refiners favor UAE and U.S. light sweet crude over Middle Eastern sour grades due to lower insurance costs and logistical reliability, despite the latter’s dominance in the country’s 70% Middle East-sourced crude imports.

Industry analysts note that South Korea’s refining sector is adapting to volatile global markets. While OPEC+ plans to resume production hikes in April 2026, adding 137,000 barrels per day, South Korea’s strategic reserves—exceeding 220 days of consumption—provide short-term stability. However, prolonged disruptions in the Middle East or rising oil prices could strain the economy, with a 10% Brent crude increase potentially worsening the trade balance by 2.68%.

The UAE’s expanded Murban crude exports, coupled with South Korea’s trade policies, underscore a shift toward securing stable, cost-effective supply chains amid regional uncertainties.