A gas station at Mannam-ui Gwangjang in Seocho-gu, Seoul [Yonhap]
A gas station at Mannam-ui Gwangjang in Seocho-gu, Seoul [Yonhap]

South Korea imported less crude oil in the wake of the Middle East war but paid more than 20% more for it, data showed Saturday. With Brent crude crossing $100 per barrel again and tensions escalating in the Red Sea, analysts warn that procurement and shipping costs could rise further.

Korea International Trade Association (KITA) data show that South Korea's crude oil import bill (based on MTI code 1310) totaled $30.23 billion from March through June, up 21.1% from $24.97 billion in the same period last year.

Import volumes fell 14.7% over the same period, dropping from 45.1 million tons last year to 38.5 million tons this year — the country brought in less oil but paid significantly more for it.

The divergence is attributed to supply disruptions caused by the closure of the Strait of Hormuz and a sharp rise in international oil prices.

As the government and industry worked to diversify crude import sources, monthly volumes gradually recovered. While still down compared with the same period last year, monthly import volumes rose from 8.46 million tons in April to 9.7 million tons in May and 9.88 million tons in June.

The Ministry of Trade, Industry and Energy said it has secured more than 110% of the previous year's average supply for July and August, and more than 90% for September, and that there are no major supply concerns at present.

Tensions have since spread from the Strait of Hormuz to the Red Sea, deepening concerns over supply chain disruptions and further price increases.

According to Korea National Oil Corporation's Petronet, Brent crude hit $100.69 per barrel on Thursday, breaking the $100 threshold for the first time in two months since May 22, when it stood at $103.54.

If passage through the Red Sea — which had served as an alternative route around the Strait of Hormuz — is also restricted, shippers would need to reroute through the Suez Canal or other alternative passages, increasing both transit times and costs.

The Ministry of Trade, Industry and Energy said none of South Korea's domestic refiners have yet committed to rerouting via the Suez Canal, though some are considering the option.

If international oil prices and procurement costs keep rising, production and logistics expenses will also increase, potentially dealing a blow to domestic industries.

The Korea Institute for Industrial Economics and Trade earlier estimated, in a report on Hormuz risks and their impact on South Korean industry following the end of the US-Iran war, that the energy price shock caused by the Strait of Hormuz closure pushed up production costs across all industries by 3.73%.


th5@heraldcorp.com