"Canada Crude Oil and Others Flowing into Korea Due to 'Trump Tariffs'... 'Refining Industry Outlook to Improve Next Year'"

2024 Petroleum Conference to be Held on the 18th

Choi Nam-ho, Vice Minister of the Ministry of Trade, Industry and Energy, is taking a commemorative photo with attendees at the '2024 Oil Conference' held on the 18th at Lotte Hotel in Jung-gu, Seoul. Photo by Yonhap News

Amid global environmental changes such as the launch of the second term of the Trump administration, an analysis has emerged that South Korea's refining industry outlook for next year will improve compared to this year.

On the 18th, Yoon Jae-sung, Senior Research Fellow at Hana Securities, stated at the '2024 Oil Conference' held at Lotte Hotel in Jung-gu, Seoul, "If the U.S. imposes tariffs on Canadian crude oil in the future, there is a possibility that more Canadian crude oil will flow into Asia," adding, "This could place South Korea's refining industry in a favorable position for raw material procurement." He further noted, "If there is no demand shock, the overall fundamentals could be better next year than this year."

He forecasted that international oil prices will show a weak trend next year. Yoon explained, "West Texas Intermediate (WTI) is expected to settle in the $60 to $70 range," and "Next year, oil production is expected to exceed demand by about 1.17 million barrels per day, maintaining an oversupply trend." This is because OPEC+ countries will increase production by 1.1 million barrels, including the U.S. producing an additional 450,000 barrels, and Guyana and Brazil each increasing by 170,000 barrels.

The Ministry of Trade, Industry and Energy, together with the Korea Energy Economics Institute and the Korea Petroleum Association, held the 6th 2024 Oil Conference on the same day under the theme of 'Global Environmental Changes and the Future of the Petroleum Industry.' This event gathered petroleum experts from the public, private, and academic sectors to share key issues and discuss strategies for industry development. Attendees included Choi Nam-ho, 2nd Vice Minister of the Ministry of Trade, Industry and Energy; Kim Dong-seop, President of Korea National Oil Corporation; Kim Hyun-jae, President of the Korea Energy Economics Institute; Cha Dong-hyung, Chairman of the Korea Petroleum Management Institute; as well as Huh Se-hong, CEO of GS Caltex; Ryu Yeol, CEO of S-Oil; and Song Myung-jun, CEO of HD Hyundai Oilbank.

At this event, voices were raised emphasizing the need for government support to secure competitiveness in response to carbon neutrality and energy transition.

Park Joo-sun, Chairman of the Korea Petroleum Association, said in his opening remarks, "In line with the era of pursuing carbon neutrality and energy transition, the refining industry, as a representative high carbon-emitting sector, faces the risk of becoming a stranded industry," adding, "The refining industry is steadily pursuing innovation through new businesses such as sustainable aviation fuel, e-fuels, and bio marine fuels."

He continued, "We must urgently introduce policy support measures already proactively implemented by major countries like the U.S. and Japan, such as investment in research and development, tax support for infrastructure construction, and production tax credits to reduce production costs in the early stages of the market," and said, "I believe this will lead the national economy forward and fulfill our mission as the guardians of energy security."

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