Import Surge and Supply Shift: South Korea’s Slick Move Amid Global Oil Uncertainty

Image Source: WSJ

South Korea lifted its May 2025 crude imports to 12.6 million tonnes from 11.8 million tonnes in the same month last year, customs data showed recently. This is when the country weathered volatile world energy markets and sought to diversify its sources of supply as Middle East tensions rise.

Key Highlights

Higher crude oil imports: South Korea received 12.6 million tonnes of crude oil imports in May 2025, increasing by nearly 7% year-on-year from May 2024.
Middle East Tensions Demand Strategic Reconsideration: Following Israel's latest bombing of Iran, South Korea's Ministry of Trade, Industry and Energy convened an emergency meeting with major oil and LNG importers to brief them on supply security. The ministry confirmed that all Middle Eastern tankers are currently operating uninterrupted but emphasized caution at all times.
Turn to the Americas: South Korea is considering in earnest increasing imports of crude from the United States, Mexico, and Brazil to reduce its excessive reliance on Middle Eastern crude. Imports from the Americas accounted for 27.2% of total arrivals of crude in April, the highest level since July 2024.
Energy Security in the Limelight: With over 63% of its crude continuing to originate in the Middle East as of April, South Korea is accelerating efforts to diversify supply, including talks for broader energy cooperation with the US as part of ongoing trade negotiations.
Trade Deficit Persists: Though imports of crude have risen, the overall South Korean trade balance remains ailing, posting a $1.7 billion deficit in early May when exports, led by petroleum products, fell.

Prospects

South Korea, the world's fourth-largest crude importer, is gearing up for potential supply shocks and price swings. The government is pushing diversification and robust reserves in the wake of the current geopolitical threats. The country's policy now includes an attempt to import additional American energy, in the form of crude and LNG, to boost energy security and trade balance.

Considering South Korea's strong reliance on Middle East oil and gas imports, I have a close connection with our energy security," the energy ministry said.

Source: S&P Global Commodity Insights, Chosun Ilbo