Korea is actively seeking to import Russian crude oil on the water, according to a senior official at the Ministry of Trade, Industry and Resources, as the world’s fourth-largest crude oil importer scrambles to secure energy resources amid escalating tensions in the Middle East.

Given that many countries are seeking or have already grabbed Russian crude cargoes stranded at sea following a U.S. waiver on Russian oil imports, the ministry is expected to resort to renegotiating existing contracts.

“It is true that we are in discussions with Korean refiners in reviewing the possibility of bringing in Russian crude,” said an official with knowledge of the matter.

“We are trying to secure Russian crude products loaded on ships before March 12. Those cargoes would likely have already been contracted by someone else, so the idea is to identify them and potentially strike deals with existing holders,” he said.

Kirill Dmitriev, one of Russian President Vladimir Putin’s close allies, took note of the move, calling it “smart.”

Still, the procurement — likely to come at a premium — could prove challenging, as many countries reliant on the Strait of Hormuz have already turned to alternative suppliers like Russia. India reportedly purchased about 30 million barrels of oil from Russia while Indonesia and the Philippines are also expressing interest.

This came after the U.S. granted India a 30-day waiver to temporarily allow imports of Russian oil stranded at sea, in order to stabilize global oil market prices.

Korea stopped importing Russian crude as of 2022 in the wake of the Russian-Ukraine war, but even before the conflict, the volume was modest at about 5.6 percent of the country’s annual imports based on 2021.

“Since it is a grade we have handled before, the idea is to turn back to those previously sourced barrels as energy sourcing conditions tighten,” said a spokesperson at Korea Petroleum Association, a lobby representing Korea’s four biggest refiners — S-Oil, SK Energy, GS Caltex and HD Hyundai Oilbank.

In the case that the volumes are secured, they would cover only a few days of demand.

“Even if we do manage to bring some in, the volumes would likely be very limited,” the Industry Ministry official said.

About 124 million barrels of Russia-origin oil exist at sea as of March 12, according to CNBC. Korea consumes an average of 2.8 million barrels of oil a day, according to BP’s Statistical Review of World Energy report.

Other industry insiders said that the process of acquiring Russian crude would be far from simple from both the procedural and diplomatic perspectives.

“Even when the import is technically available, the country should also take into account the relations with the United States as it is still in the process of sealing a tariff deal,“ said a source at a major oil supplier based in Korea.

“Given the multi-layered nature of sanctions on Russia — including financial restrictions and Europe’s secondary sanctions — transactions with any Russian counterpart could be tricky,” the source added.

About 70 percent of South Korea’s crude oil imports come from the Middle East, with the vast majority of those shipments passing through the Strait of Hormuz.

The government said on March 4 that the oil reserves stand at 190 million barrels.
Source: Korea JoongAng Daily