South Korea's four major oil refiners are exploring imports of Venezuelan crude oil as conflicts in the Middle East disrupt shipping through the Strait of Hormuz, a Korea Petroleum Association official said.

The Strait of Hormuz is a critical chokepoint for global oil trade, through which roughly one-fifth of the world's petroleum consumption passes. Ongoing instability in the region has prompted Asian importers to seek alternative supply routes and crude sources, accelerating a diversification trend that has gained urgency as shipping insurance premiums and freight costs have risen during periods of heightened regional tension.

GS Caltex, a joint venture between Chevron and South Korea's GS Energy, imported 110,000 barrels of Venezuelan crude in June to test its quality, the official said. The refiner will assess whether the crude is compatible with its facilities and evaluate product yields before committing to further purchases. Venezuela's crude is predominantly heavy and sour, which requires complex refining configurations; South Korea's major refiners operate some of the most advanced upgrading capacity in Asia, potentially positioning them to process heavier grades that simpler refineries cannot handle economically.

The three other major South Korean refiners — HD Hyundai Oilbank, SK Innovation, and S-Oil — are also weighing potential Venezuelan crude imports, the official added.

The refiners aim to reduce their dependence on Middle Eastern oil, with a focus on price competitiveness and supply stability, the official noted. South Korea is among the world's largest crude oil importers, relying heavily on Middle Eastern suppliers such as Saudi Arabia, the United Arab Emirates, and Kuwait. The country imports virtually all of the crude it processes, and its refining sector — with combined capacity exceeding 3 million barrels per day — serves both domestic demand and a sizable export market for refined petroleum products across the Asia-Pacific region.

The companies are also examining alternative imports from Canada and Australia. They have ruled out U.S. shale oil due to the smaller operational size of individual suppliers there, which complicates securing consistent large-volume shipments, the official said.

South Korea's interest in Venezuelan oil follows U.S. President Donald Trump's call for oil companies to invest $100 billion in Venezuela and rebuild its energy sector. Venezuela holds the largest proven oil reserves in the world, though production has declined sharply from levels seen in the late 1990s and early 2000s due to years of underinvestment, sanctions, and infrastructure deterioration.

Several U.S. and multinational oil companies have shown interest in Venezuela this year after the U.S. removed President Nicolas Maduro in a January 3 raid.

Source: Investing.com