Tax Implications Could Weigh on South Korean Crude Imports

While much of the world’s attention is currently focused on escalating tensions between North and South Korea, the oil markets have also been keeping an eye on the Korean peninsula. South Korea is weighing eliminating tax rebates on refined product exports, provided those products were refined from crude sourced from countries that have free-trade agreements (FTAs) with South Korea. Although many are concerned that this change could reverse recent increases in crude shipments to South Korea from the North Sea, the effect on the tanker market could in fact be relatively subdued. More substantial impacts on tanker demand would be predicated on additional FTAs being signed that are currently in negotiation. Download here