Traders look at key trade speeches that could boost Middle East oil to Korea

Traders look at key trade speeches that could boost Middle East oil to Korea

While any agreement remains some way off, traders are already paying close attention to a possible deal that may remove or lower a 3% levy imposed on imported crude, possibly boosting the Asian nation’s intake from the oil-rich region.

Oil traders are turning their focus to a potential trade agreement between South Korea and a few significant Persian Gulf makers that might lessen costs of Middle Eastern crude in the months to come. South Korea’s trade ministry has consented to an agreement to continue free-trade agreement negotiations with Gulf Cooperation Council individuals without precedent for about 10 years, as indicated by an assertion on its site. All things considered, an official from the Ministry of Trade, Industry and Energy cautioned that it’s too soon to foresee the potential implications.

The GCC groups powerhouse Saudi Arabia, as well as the United Arab Emirates, Bahrain, Kuwait, Oman and Qatar, who’ve benefited from oil’s rally to a seven-year high as global demand recovers. South Korea, Asia’s fourth-largest oil consumer, took about two-thirds of its crude supplies from the GCC region in 2020, according to the trade ministry. The two sides had three rounds of negotiations in 2007, but they were then put on hold in January 2010.

South Korea and GCC member countries will go through each traded item where taxes vary, the official said, asking not to be identified as the discussions are private.

While South Korea’s baseload for refinery feedstock is from the Middle East, the country has attempted to diversify sources of oil imports in the past years by offering freight rebates for non-Middle Eastern crude on top of free trade pacts with some nations such as the U.S.

That approach has made long-haul crude more attractive in terms of overall pricing than before. For American crude, the nation’s imports increased more than 20% in the first 10 months of last year, compared with the same period in 2020, according to U.S. Energy Information Administration data.

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