Korean Oil Refineries See Surge in Petroleum Product Exports in First Half

According to the Korea Petroleum Association, the first half of 2023 saw an increase in petroleum product exports from Korea's four largest oil refiners. SK Energy, GS Caltex, S-OIL, and HD Hyundai Oilbank collectively exported 228.5 million barrels, marking a 3.2 percent increase compared to the previous year. This growth can be attributed to the industry's efforts to expand exports, despite a contraction in domestic demand caused by a slowdown in the petrochemical sector and maintenance work at certain refineries. However, the export value decreased by 22.1 percent to US$21.811 billion due to weak international oil prices, resulting in lower export unit prices. This decline in profitability is expected to impact the first-half operating results of the Korean refinery industry, with export profitability decreasing by 52 percent to US$11.4 per barrel.

Among the petroleum products exported, diesel accounted for the largest share at 41 percent, followed by gasoline at 20 percent, jet fuel at 19 percent, and naphtha at 8.0 percent. The top export destinations were Australia, Singapore, China, Japan, and the United States. Notably, gasoline exports to the United States reached a record high of 5.25 million barrels in the first half of the year, representing a 95 percent increase compared to the previous year. This surge in gasoline exports can be attributed to the expansion of U.S. gasoline exports to Europe after the Ukraine-Japanese War, increased domestic consumption during the summer driving season, and a decrease in U.S. gasoline inventory levels.

Despite the recent growth in petroleum product exports, uncertainties surrounding external conditions, such as concerns about a global economic slowdown and the OPEC+'s production cut policy, raise doubts about the future trajectory of Korea's petroleum product exports. It remains unclear whether the upward trend will continue or if demand will decrease due to these volatile factors. Monitoring these external conditions will be crucial for the Korean refinery industry moving forward.