South Korea to Import Argentine Crude Oil Starting Next Year

The South Korean government will begin importing crude oil from Argentina next year. Following a pilot purchase by HD Hyundai Oilbank this year, both governments have agreed to support stable imports and gradually increase the volume.

Wi Sung-lak, the National Security Office chief, revealed this information during a briefing in Buenos Aires on July 31.

He stated, "While the initial volume is not large, it marks an important beginning. Argentina's capacity for oil production and export is growing, indicating more opportunities for cooperation in the future."

According to the government, domestic companies have conducted a pilot import of Argentine crude oil this year, with plans to commence regular imports next year. The two governments will continue discussions to ensure the scheduled oil imports proceed smoothly and to expand future purchase volumes.

HD Hyundai Oilbank is the company that made the first purchase this year. In a written interview with the Spanish news agency EFE prior to a summit, President Lee Jae-myung noted that HD Hyundai Oilbank had purchased Argentine crude oil for the first time this year, amounting to approximately 880,000 barrels. However, it is yet to be determined if other domestic refiners will participate in next year's imports.

The government's focus on Argentine crude oil stems from its high dependence on the Middle East, from which South Korea imports about 70% of its crude oil. Instability in the Middle East or disruptions in the Strait of Hormuz could directly impact the country's energy supply.

Argentina can export oil via the Atlantic, making it less susceptible to major maritime chokepoints like the Strait of Hormuz and the Red Sea. Although the initial import volume is small, securing a new supply base in South America is significant for energy security, according to Wi.

To manage follow-up actions from the summit, both countries agreed to reactivate the Energy Resource Cooperation Committee. This committee will focus on discussions not only about the import of Argentine crude oil but also on natural gas, nuclear energy, and key minerals such as lithium and copper.

Wi emphasized, "Securing diverse oil supply lines is the direction we must pursue following the situation in the Middle East, and we will strive to secure more Argentine crude oil."

Additionally, a double taxation agreement was reached during the summit to reduce the tax burden on South Korean companies operating in Argentina. The two sides also agreed to promptly resume negotiations on the Korea-Mercosur trade agreement to enhance market access for South Korean businesses in South America.

In particular, to expedite the entry of K-food into the Argentine market, both countries will discuss designating South Korea as Argentina's 'High Sanitary Surveillance Agency.'

Both nations will reactivate the Economic Joint Committee and the Energy Resource Cooperation Committee to manage the follow-up actions from the summit. The Economic Joint Committee will address trade and investment issues, while the Energy Resource Cooperation Committee will explore cooperation in lithium, copper, crude oil, gas, and nuclear energy.

Furthermore, both countries will work towards the swift conclusion of a mutual recognition agreement for driver's licenses and expand cooperation in culture, education, and human exchanges. New collaborative projects in defense, space, Antarctica, and health will also be explored.

Wi concluded, "Both leaders shared a commitment to quickly deliver tangible results that the public can feel through efficiency and speed."