S. Korea welcomes chance to diversify oil supply with U.S., Iran crude

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South Korea is eager to increase the diversity of its oil suppliers by looking at U.S. and Iranian supplies as more exports from those countries become available, the South Korean Ministry of Trade, Industry and Energy said on Wednesday.

The country welcomed the recent repeal of the 40-year-old crude export ban in the United States and the scheduled lifting of sanctions in Iran, the ministry statement said according to Reuters.

South Korea is the world’s fifth-largest crude importer and one of the major buyers of Iranian oil.

‘If the sanctions on Iran are lifted, refiners expect to hike their Iranian crude imports to the level seen before the sanctions were imposed,’ the statement said. Refiners hope to import U.S. condensate as supply of the light oil in Asia is now tight, it added.

South Korean refiners will look at importing supplies of U.S. condensate should U.S. benchmark West Texas Intermediate price drop to a discount of between $4-$6 a barrel to Middle East benchmark Dubai, the statement said, citing the refineries.

February WTI futures were trading at $36.40 per barrel on Wednesday while the February Dubai swap is at $33.08 a barrel.

South Korea’s crude oil shipments from Iran fell nearly 30 percent in November from a year ago, with imports in the first eleven months of 2015 falling 0.8 percent and meeting sanction requirements over Tehran’s nuclear program.

The U.S. Congress this month voted to lift a 40-year-old ban to export domestic crude supplies, and although no immediate large-scale exports are expected, this does mean that some American oil will flow from the United States into the global market next year, shifting the oil balance.

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