South Korea Halted CPC Blend Crude Imports In February

South Korea halted Kazakhstan’s CPC Blend crude imports in February, after importing an average of 3-5mbbl per month over the past years, data from Korea National Oil Corp showed, amid difficulties and higher costs in shipping due to Red Sea disruptions, sources told S&P.

• Logistics for importing CPC blend have become more complicated due to less vessels willing to travel via the Red Sea, while delivery costs are still trending higher due to rising insurance premiums, sources told S&P.
• CPC Blend crude usually first gets delivered from production facilities to the Russian Black Sea port of Novorossiysk via the Tengiz-Black Sea pipeline before sailing through the Suez Canal to reach South Korean ports.
• Since late 2023 – the start of Houthi rebel attacks on vessels in the Red Sea - CPC Blend crude cargoes for South Korea have diverted away from the Red Sea and sailed via the Cape of Good Hope instead, sources said.
• "It has become way too troublesome and costly to import CPC Blend crude and refining economics are not exactly [ for cracking the light sweet Kazakh crude] ideal," another source said.
• South Korea may still receive a few cargoes in the coming months as there are few delays in arrival with the tankers taking the longer Cape of Good Hope route.
• However, refiners are expected to significantly reduce CPC Blend crude purchases going forward, analysts said.
• In February, South Korea imported 13.63mbbl of mostly light sweet crude, up by 22.1% year on year, KNOC data showed.
• In total, South Korea imported 89.03mbbl, or 3.07mbpd, in February, up by 2.1% on the year.