South Korea is ramping up imports of US crude as the government and refiners move to secure alternative supplies amid concerns over potential disruptions from the Middle East, with US President Donald Trump urging allies to buy American oil.
“As imports of Middle Eastern crude face disruptions, all four major domestic refiners — SK Energy, GS Caltex, S-Oil and HD Hyundai Oilbank — are actively seeking alternative supplies worldwide,” a trade official said Thursday. “Among these, US crude accounts for the largest share.”
The official added that US crude already makes up a meaningful portion of Korea’s imports and is expected to increase further.
South Korea has historically relied heavily on Middle Eastern oil, but diversification efforts to hedge geopolitical risks have steadily reduced that dependence. The region’s share of total imports fell from 86 percent in 2016 to 69.6 percent last year.
US crude has filled much of that gap. Its share rose from just 0.21 percent in 2016 to 15.7 percent in 2024 and 16.3 percent last year, following Washington’s lifting of its export ban in 2015 and the expansion of shale output. The trend was further reinforced by Trump’s push to boost domestic energy production.
Among refiners, S-Oil — whose largest shareholder is Saudi Aramco — continues to rely heavily on Middle Eastern crude. In contrast, GS Caltex and HD Hyundai Oilbank are actively securing US supplies, while SK Energy is also expanding US sourcing, industry sources said.
Refiners are also exploring other alternatives, including supplies from Africa, Australia and non-Hormuz Middle Eastern producers. “Options are not limited to the US, as companies must weigh prices, freight costs and other key factors,” one industry source said.
Another source noted that diversification into US crude predates the latest Middle East tensions. “Even before the current crisis, Korean companies had been steadily increasing US imports. With supply risks rising, it is natural that US crude has become a key alternative,” the source said.
One factor supporting US imports is the government’s strategic petroleum reserve (SPR) swap system, which helps offset the longer delivery time for US crude — around 50 days, compared with about 14 days for Australian crude and 20 days for Middle Eastern supplies.
Under the system, refiners can borrow crude from government stockpiles using shipping documents as proof of incoming cargo, and later return the equivalent volume once deliveries arrive. This allows companies to secure immediate supply without operational disruptions.
Korea’s increased imports of US crude also align with Washington’s push to expand energy exports. In a White House speech earlier, Trump urged countries dependent on Middle Eastern energy — particularly via the Strait of Hormuz — to “buy American oil.”
Earlier Thursday, Yang Ki-wook, deputy minister for industrial policy and security at the Industry Ministry, said the government is exploring alternative supply routes that bypass the Strait of Hormuz. These include crude from the US as well as Saudi Arabia, Oman and Kazakhstan, and naphtha from Algeria and Greece.
He added that the government and industry are working to match demand with available supply while assessing the feasibility of each option.
hyejin2@heraldcorp.com
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