South Korea’s major oil refiners are going all-out to recoup losses from a Covid-19 pandemic-driven slump with market and product diversification.
Petroleum products exported by local oil refineries including SK Energy, GS Caltex, S-Oil and Hyundai Oilbank in the first quarter ended March amounted to 90.94 million barrels, a 27.4 percent decrease from a year ago, while their export value came to $6.14 billion, down 18.9 percent over the same period, according to data compiled by Korea Petroleum Association on Tuesday. The export volume was the lowest in 10 years since the first quarter of 2011.
The overall petroleum exports dropped after the oil refineries slashed utilization rate to 72 percent in the first quarter from 81.6 percent a year ago to cope with weak global oil demand in the face of the ongoing Covid-19 pandemic.
But the refineries are seeking to offset losses in output and sales by focusing on countries on the recovery track and products with demand revived.
China, the biggest importer of Korean petroleum products, accounted for 36.9 percent of the Korean refineries’ total exports in the first quarter, doubled from a 19-percent share a year ago. Exports to China shot up to 33.6 million barrels in the first three months of the year on soaring demand driven by the government’s aggressive stimulus measures. Japan came second (14.4 percent), up by one notch from a year ago with 13.12 million barrels. Japan was followed by Australia (8.8 percent), USA (8.6 percent), and Singapore (6.9 percent).
Exports of kerosene for heating to Japan increased 22 percent in the first quarter as oil refinery facilities in the country came to suspension due to an earthquake in Fukushima in February.
Exports to Australia also showed remarkable growth. As jet fuel exports to Australia plunged 99 percent after the pandemic grounded flights, the Korean refining industry more than doubled diesel exports.