Oil Industry Records 22 Trillion Won in Petroleum Product Exports in Q3... Highest Quarterly Figure Ever

Recovery through exporting over 60% of crude oil imports contributes to trade balance improvement

A gas station in Seoul. The photo is not directly related to the article. Photo by Jinhyung Kang aymsdream@

In the third quarter, the export volume and export value of petroleum products in the refining industry reached record highs for the quarter, maintaining their position as the second-largest national export item.

The Korea Petroleum Association (KPA) announced that in the third quarter, the export volume of petroleum products from domestic refiners such as SK Energy, GS Caltex, S-OIL, and Hyundai Oilbank reached 133 million barrels, with export value at 16.343 billion USD (approximately 22 trillion KRW), representing increases of 19.0% and 81.2% respectively compared to the third quarter of last year.

This Year’s Cumulative Export Value Hits 'All-Time High' of 56 Trillion KRW

As of the third quarter this year, the cumulative export value also reached an all-time high, with export volume at 354.33 million barrels and export value at 44.36 billion USD (approximately 56 trillion KRW), marking increases of 15.2% and 91.4% respectively compared to the same period last year.

Thanks to this improved export performance, petroleum products ranked second among major national export items announced by the Ministry of Trade, Industry and Energy, following semiconductors, firmly establishing themselves as a representative national export product.

Notably, the proportion of crude oil import costs recovered through petroleum product exports by refiners up to the third quarter exceeded 60% for the first time, reaching 60.2%. Amid a trade deficit persisting for seven consecutive months, the refining industry has significantly contributed to improving the national trade balance through petroleum product exports.

The rapid expansion of petroleum product exports is attributed not only to increased export volume but also to rising export unit prices. Due to the prolonged Russia-Ukraine war, global shortages of petroleum supplies such as diesel and jet fuel remain unresolved. Leveraging the excellent refining capabilities of the domestic refining industry, which possesses the world’s fifth-largest refining capacity, export volumes have increased. Additionally, supported by rising international oil prices, the export unit price in the third quarter reached 123 USD per barrel.

However, recent downward revisions of global economic growth rates by energy-related organizations such as the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA) have led to declines in international oil prices and refining margins. The export profitability (the difference between petroleum product export unit price and crude oil import unit price) averaged 12.5 USD per barrel in the third quarter, a 56% decrease compared to the previous quarter, suggesting that the refining industry’s third-quarter business performance is expected to be relatively weak.

Largest Export Destination is Australia (20.6%)

Meanwhile, the top five export destinations for petroleum products in the third quarter and their export value shares were Australia (20.6%), Singapore (13.3%), Malaysia (7.3%), the Philippines (6.9%), and China (6.6%).

Australia has relied on imports of refined petroleum products since shutting down more than 50% of its refining capacity from 2020. Thanks to the proactive export efforts of domestic refiners, Australia has remained the largest export destination for petroleum products every quarter this year. In particular, export value increased by 293% and export volume by 131%, marking the largest growth among major countries.

Malaysia, which rose to third place, saw a 142% increase in export value from domestic refiners due to a shift in bunker C oil import sources from Russia to Korea.

By petroleum product export value ranking and share, diesel accounted for 46.8%, followed by jet fuel (20.2%), gasoline (16.7%), and naphtha (5.1%). This is analyzed as domestic refiners responding to ongoing supply shortages of diesel and jet fuel caused by continued geopolitical instability in Europe and increased passenger demand through exports.

In particular, diesel exports are expected to expand further due to increased demand for heating oil substitution in winter and stockpiling in preparation for the EU’s sanctions against Russia, which will take effect from February next year.

Jet fuel exports showed the highest growth rate among petroleum products, with export value increasing by 131.1% compared to the same period last year. Exports to the Netherlands and Singapore, key petroleum spot markets in Europe and Asia respectively, accounted for 28% and 19%, ranking first and second.

A representative from the Korea Petroleum Association stated, "Although global petroleum supply and demand instability continues, based on the excellent refining competitiveness of domestic refiners, we expect sufficient domestic supply as well as export growth, projecting export performance of approximately 63 billion USD (about 89 trillion KRW) by the end of the year." They added, "We will strive to achieve the highest export value and contribute further to energy security and the national economy."

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