SK Innovation's oil refining factory in UlsanSK INNOVATION
Korea's exports of petroleum products to the United States have contracted sharply since the outbreak of the Iran war, as domestic oil refiners redirect cargo to Asian markets amid heightened geopolitical risk.
The supply shift could drive up U.S. airfares, marking a stark departure from historical trends. Historically, the United States has relied on Korea for roughly 70 percent of its total jet fuel imports—a figure that climbs as high as 85 percent in regions like the West Coast.
Korea shipped a total of 6.26 million barrels of petroleum products to the United States in March and April this year, a 40 percent drop from the same period a year earlier, according to the latest data from Korea National Oil Corporation.
Jet fuel exports to the United States, the top overseas market for Korean suppliers, plunged 39 percent from 6.86 million barrels to 4.19 million barrels, while exports of gasoline plummeted 50 percent to 1.09 million barrels for the two months this year.
During the same period, Korea’s jet fuel exports to Japan surged 410 percent from 0.59 million barrels to 3.01 million barrels, as Korea turns to neighboring Asian countries for higher margins.
This is part of deepening energy cooperation between the two neighboring countries as Korean President Lee Jae Myung and Japanese Prime Minister Sanae Takaichi in May vowed to collaborate on the energy sector such as crude oil supply chains and liquefied natural gas amid growing uncertainty in maritime shipping stemming from the Middle East conflict.
Exports to Singapore climbed 41.4 percent, while to the Philippines rose 83.3 percent.
"With China and Thailand controlling jet fuel exports amid war, nearby Asian countries that usually import jet fuels from those two countries are turning to Korea for imports," said a source at a major oil refining company in Korea. "Stronger margins in nearby markets have reduced the incentive to ship cargo across the Pacific to the United States."
Profitability for domestic refiners rose; Korea's average jet fuel export price reached $197.26 per barrel in March and April, an all-time high since 1992, marking a 137 percent jump from $83.34 per barrel in the same period a year earlier.
Vessels are seen in the Strait of Hormuz from Oman’s Musandam Peninsula on June 1REUTERS/YONHAP
Any sustained decline in Korean shipments makes the United States more vulnerable due to its heavy reliance on Korea for imported jet fuels. Korea was the largest jet fuel exporter to the United States with 68.6 percent of total imports in 2025, according to the U.S. Energy Information Administration.
In certain areas like California, Washington and Hawaii, Korean cargo supplied 85 percent of imported jet fuel.
Korea is the world’s top jet fuel exporter, producing over 150 million barrels as of 2024. Of them, 90 million barrels were shipped overseas, accounting for 30 percent of the global market.
Of the exports, 41 percent were shipped to the United States, totaling 36.5 million barrels, while Australia ranked second with 14.06 million barrels, according to the Korea Petroleum Association as of 2024.
Korea's advanced refining capabilities have also reinforced its position in global fuel markets. Despite being a non-oil-producing nation, local refiners have invested billions of dollars over decades to upgrade processing facilities and enhance operational flexibility, enabling capabilities to diversify crude sourcing and process a broad range of feedstocks from the Middle East, Asia and Africa.
Korean refiners, as a result, can handle more complex crude blends that many regional competitors — particularly refiners historically reliant on Middle Eastern grades — are less equipped to process.
Jet fuel requires advanced refining, as even trace amounts of water can be catastrophic for aircraft operating in low-pressure, low-temperature environments.
"Countries like the United States and Australia are highly dependent on Korea for certain petroleum products, and Korea may be able to use its role as a key supplier as a source of leverage when sourcing crude oil," said Ryou Kwang-ho, a senior researcher specializing in the Middle East and energy security at the Korea Institute for International Economic Policy.
Korea ranks among the world’s top five in refining capacity, and its upgrading capacity — which allows refiners to convert low-value residual fuel oil into premium transportation fuels such as gasoline, diesel and jet fuel — averages around 30 percent, roughly double the global norm of 10 to 15 percent.
In the case of HD Hyundai Oilbank, that share exceeds 40 percent.
