News<\/p>\n
17\/03\/26<\/p>\n
South Korea caps fuel exports to safeguard supply<\/p>\n
Singapore, 17 March (Argus) \u2014 South Korea’s Ministry of Trade, Industry and
\nEnergy (Motie) has introduced mandatory export caps on refined petroleum
\nproducts, curbing shipments to 100pc of monthly 2025 levels in an effort to
\nsafeguard domestic supply. The directive, applied to gasoline, diesel and
\nkerosene on 13 March, will be extended to include naphtha, as the government
\nseeks to secure feedstock availability due to continued supply disruptions
\nthrough the strait of Hormuz. The export limits are intended to complement
\nrecently introduced domestic price controls. By restricting exports to prior
\nyear volumes, Motie aims to discourage refiners from diverting supplies into
\nhigher priced international markets. The ministry may adjust the export ceilings
\nin consultation with industry stakeholders, according to government documents.
\nThe country’s major refiners are also required to maintain domestic supply at no
\nless than 90pc of volumes recorded during the same period last year for March
\nand April, South Korean market participants told Argus , citing the ministry’s
\nannouncement. The new measures include wholesale price caps that took effect on
\n13 March, with ceilings set at 1,724 won\/litre for gasoline, W1,713\/litre for
\nautomotive diesel and W1,320\/litre for kerosene. Motie has indicated it may
\nprovide compensation to refiners for losses incurred under the new measures and
\nhas instructed companies to submit supporting documentation for any claims. The
\nmeasures are scheduled for review after 14 days, when the government is expected
\nto reassess the policy in light of the ongoing developments. Market Impact In
\nterms of market impact, the development is viewed as positive and offers some
\nrelief as it stops short of a full export ban, though the effect is expected to
\nvary across products. Market participants were initially wary that South Korea
\nmight implement a full oil product export ban, similar to the measures adopted
\nearlier by China. South Korea and China together account for more than half of
\nthe Asia Pacific region’s seaborne clean product export supply, based on data
\nfrom Kpler. Refiners are likely to maintain their term exports of oil products,
\nbut will offer little to no additional volumes on a spot basis, South Korean
\nmarket sources said. For gasoline, term contract volumes are likely to proceed
\nas planned, while spot availability could shrink sharply in the near term. But
\nthe drop in spot supply will also be driven by current dislocations in Dubai
\ncrude pricing, according to a South Korea\u2013based gasoline trader. “Gasoline
\nrefining margins are currently negative against Dubai crude pricing, so
\nirrespective of government policy, spot volumes will be significantly reduced,”
\nthe trader said. The dislocation in gasoline crack spreads has been driven by a
\nsharp jump in Dubai crude prices, with crude rising disproportionately faster
\nthan gasoline. Many Asian refiners buy Middle Eastern crude on Dubai pricing and
\ntypically hedge their procurement and spot sale requirements against Dubai. “It
\neven makes more sense to export fuel oil instead of processing it through the
\nfluid catalytic cracker (FCC) unit, with fuel oil margins against Dubai looking
\nmuch more attractive,” the trader added. Refiners will also be more incentivised
\nto raise jet fuel yields at the expense of gasoline, said another Korean fuel
\ntrader. Latest spot deals for jet fuel buying demand in the region indicate that
\nearly April loading Medium Range (MR) jet fuel cargoes can fetch cash premiums
\nof around $20\u201330\/bl to Singapore spot jet fuel assessments, according to
\nfeedback gathered by Argus . But export regulations and run cuts at other north
\nAsian exporters, such as China and Taiwan, will still keep the Asia Pacific jet
\nfuel complex tight. Korean refiners, including Hyundai Oilbank, have already
\nplanned lower jet fuel exports in April because of planned maintenance at the
\n520,000 b\/d Daesan refinery. Korean refineries in total average around 326,000
\nb\/d of gasoline exports. Gasoil exports from South Korea average around 553,000
\nb\/d, while jet exports account for about 246,000 b\/d. Refiners in Korea also
\ntypically export around 300,000t of naphtha per month, mostly to neighbouring
\ncountries like Japan and China, although this is dwarfed by the roughly 2mn
\nt\/month of naphtha imports that moves into Korea \u2014 of which roughly 60-70pc
\ncomes from the Middle East. But this development should still provide some
\nrelief to import reliant countries such as Australia, which has term negotiated
\ngasoline and gasoil volumes with South Korea. Australia has already implemented
\nmeasures such as suspending its gasoline quality standards to boost supply flows
\nand relaxing the country’s minimum stockholding obligation (MSO) to enable more
\nfuel to reach the market. These are among the steps taken to mitigate growing
\nfuel security risks. Fuel suppliers have already chartered rare gasoline and
\ndiesel cargoes from as far as the US Gulf Coast for late March loading to meet
\nAustralian demand, according to trade sources and ship brokers. It typically
\ntakes more than one month for an MR tanker to sail from the USGC to Australia.
\nFeedstock concerns still loom South Korean refiners continue to grapple with
\ndisruptions to Middle Eastern crude supply, though the strain has been partially
\neased by the recent strategic petroleum reserve (SPR) release by the government
\nand fresh US sanctions waivers on Russian oil. While direct intake of Russian
\ncrude by South Korean refiners remains unlikely, the waivers are expected to
\nredirect a larger share of Russian cargoes towards Indian buyers. This, in turn,
\ncould free up alternative grades for Korean refiners, including the potential
\nfor increased nominations from Saudi Arabia’s Yanbu port, supported by the
\ndiversion of crude flows via the kingdom’s 7mn b\/d east\u2013west pipeline. Some
\nrefiners have also begun exploring procurement options beyond their traditional
\nslate, with discussions extending to more unconventional grades \u2014 including even
\nthe possibility of securing Libyan crude, a Korean refining source noted. By
\nAsill Bardh, Lu Yawen, Cara Wong Send comments and request more information at
\nfeedback@argusmedia.com Copyright \u00a9 2026. Argus Media group . All rights
\nreserved.<\/p>\n","protected":false},"excerpt":{"rendered":"News 17\/03\/26 South Korea caps fuel exports to safeguard supply Singapore, 17 March (Argus) \u2014 South Korea’s Ministry…\n","protected":false},"author":2,"featured_media":3502,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[42,43,40,38,41,39],"class_list":["post-345139","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-headlines","tag-news","tag-top-news","tag-top-stories","tag-topnews","tag-topstories"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/345139","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=345139"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/345139\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/3502"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=345139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=345139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=345139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}