Korean oil refiners are striving to either diversify crude oil import sources or expand the scope of trade contracts in advance of a possible ban on oil imports from Iran.
Among the alternative sources of crude oil are countries in Africa and Europe, according to the Korean National Oil Corp.
KNOC data showed Wednesday that the nation recently imported about 1.7 million barrels from Gabon. This was the first time in more than two years since Korea imported Gabonese oil in December 2009.
Imports from Norway and the United Kingdom came to 3.7 million and 5.2 million barrels, respectively, surpassing the figure of yearly oil imports from the European countries in 2011.
Though local refiners have been successful in developing substitute import sources, they had to shoulder the burden of higher prices.
As of last March, Iranian oil prices stood at $117 per barrel in the international market while Gabonese oil prices reached $124 per barrel.
Prices of oil from Norway and the U.K. came to $126 and $129 per barrel, respectively, in the same month, KNOC said.
Hyundai Oilbank and SK Innovation, two major companies trading with Iran, saw their combined imports from the Middle Eastern country post 17.7 million barrels during the first quarter of 2012, down 22.2 percent from 22.8 million barrels over the same period last year.
Refiners are also increasing imports from other Middle East nations such as the United Arab Emirates, Saudi Arabia and Kuwait.
The European Union legislated rules in March to stop insurance coverage on all tankers carrying Iranian crude oil starting July 1 as part of sanctions on Iran to make it give up its nuclear program.
Seoul officials reportedly said the EU may apply for the halt to insurance coverage to Korea at the end of this month in consideration of the some 40-day period of oil transportation.
Iranian oil accounted for 9.4 percent of Korea’s crude oil imports ― or 87 million barrels out of the total 930 million barrels ― last year.
Under the situation, the hike in gasoline prices is unavoidable. Considering disconnecting contacts in consideration of oil shipment period, the prices could likely be affected before July.
Some market observers issue the possibility that a price hike will start later this month, citing psychological factors.
They predict the price hike level will be at least by 200 won per liter and may surpass the level of 300 won.
The EU’s sanctions on Iran would result in an imbalance of global crude supply and demand and an increase of oil prices, weighing on the Korean economy and exacerbating Korea’s trade terms with Iran, according to the Ministry of Knowledge Economy.
By Kim Yon-se (firstname.lastname@example.org