Policy Changes Could Affect South Korean Tanker Demand

Effective July 1st, South Korea, the fifth largest buyer of crude cargoes in the world, confirmed the elimination of tax rebates on refined product exports sourced from countries with which they shared a free-trade agreement (FTA). While this move will likely negatively impact the amount of crude oil South Korea imports from the North Sea, it should not be too detrimental to the South Korean demand for tankers as a whole due to the relatively small market share of North Sea crude. And although this policy change will dampen tanker movement from the North Sea to South Korea, another newly implemented policy favoring non-Middle Eastern crude oil could balance out or even overtake the demand negatives associated with the change. Download here