Petroleum Industry Records Half-Year Export Revenue of $28 Billion for Petroleum Products, Highest Ever in Half-Year Period

Petroleum Products Rise to 2nd Place Among Major National Export Items
Significantly Contributing to Expansion of Export Competitiveness
61% of Crude Oil Import Value Recovered Through Petroleum Product Exports

Source=Korea Petroleum Association

[Asia Economy Reporter Jeong Dong-hoon] The export value of the refining industry in the first half of this year exceeded approximately 36 trillion won, marking the highest half-year record ever. It ranked second among the country's major export items, following semiconductors, significantly contributing as an export industry.

On the 26th, the Korea Petroleum Association announced that the export value of petroleum products from the four domestic refining companies?SK Energy, GS Caltex, S-OIL, and Hyundai Oilbank?in the first half of this year reached $27.956 billion (about 36.681 trillion won), a 97.6% increase compared to the same period last year. This surpassed the highest level in 10 years since 2012.

Additionally, during the same period, about 61% of the crude oil import value, which amounted to $46 billion (approximately 60.375 trillion won), was recovered through exports. This is also evaluated to have contributed to improving the national trade balance.

The export value in the first half of this year is the highest ever recorded for both the first and second halves combined. This is attributed to the rise in export unit prices due to increasing international oil prices, the recovery of the global economy and increased oil demand following the easing of COVID-19 quarantine measures, and active responses such as raising operating rates. Strategically, export volumes were increased to countries with petroleum product shortages like Australia and the Philippines.

The export unit price of petroleum products in the first half of this year rose 75% compared to the same period last year, reaching $126.6 per barrel (about 166,175 won), and export volume increased by 13% to 220.9 million barrels. In particular, the export unit price of diesel reached $135.2 (about 177,463 won) due to global supply instability caused by the Russia-Ukraine war. Aviation fuel exports saw the largest increase among major petroleum products, with export value rising 171.3% and export volume increasing by 40%, driven by growing global air travel demand.

The export profitability, calculated by subtracting the crude oil import price from the petroleum product export price, also increased nearly threefold year-on-year to $24.8 per barrel due to improvements in global refining margins, significantly contributing to the strong business performance in the first half.

Meanwhile, the top five countries by petroleum product export value were Australia (16.2%), Singapore (12.2%), the United States (9.3%), the Philippines (9.0%), and China (8.6%). China had been the largest export destination until last year, but exports to China sharply declined due to the Chinese government's imposition of consumption tax on Light Cycle Oil (LCO) since June last year and the prolonged lockdown measures in Shanghai during the first half of this year, which reduced domestic oil demand in China.

On the other hand, Australia jumped from fifth place in the same period last year to become the largest export destination. This is because 50% of Australia's total refining capacity was shut down in 2020 and last year, making petroleum product imports inevitable for the time being. It is analyzed that domestic refiners strategically increased exports to Australia.

However, despite the favorable export conditions for petroleum products in the refining industry, the sustainability of this trend is uncertain due to recent global economic recession concerns, reduced demand, shrinking refining margins, and falling oil prices, despite global supply shortages.

A representative from the Korea Petroleum Association stated, "The domestic refining industry is contributing to stable domestic supply despite high oil prices and global oil supply and demand instability, and is actively exporting to profitable overseas markets, enhancing the competitiveness of Korea's petroleum industry." They added, "Although uncertainties in export markets such as global economic recession and COVID-19 resurgence are expected to be greater in the second half than in the first half, the refining industry will continue to compete in the global market by producing high-quality products based on excellent refining capabilities and diversifying export regions."

This content was produced with the assistance of AI translation services.