(Dow Jones) LONDON–The price-supporting trade in crude oil from the North Sea to South Korea looks set to continue in July as Statoil ASA (STO) moves to charter a supertanker to make the voyage, shipbrokers told Dow Jones Newswires Thursday.
The movement of oil from the North Sea to Asia was unheard of before the end of last year, but a free trade agreement between South Korea and the European Union struck in mid-2011 has opened up the trade. Refiners in the Asian country save 3% in import duties on North Sea oil grades as a result of the agreement, opening up a trade route that has seen millions of barrels head east from Europe this year and helping to prop up prices in the North Sea market.
Statoil is the latest company to take advantage of the trade, looking to ship some 2 million barrels east in July, shipping fixtures showed.
The company has moved to charter the supertanker Elizabeth I.A. to load North Sea oil July 16-18 for the voyage to South Korea. The cost of the shipment is $4.875 million, according to the fixtures.
Shipbrokers said rumors were swirling that another tanker could also be booked to make the voyage, with Chevron Corp. (CVX) or Royal Dutch Shell PLC (RDSA) the possible charterer, but said no fixture had been made as yet.
The price of oil in the North Sea market slid this week amid weak demand and ample supply of similar grades, but the latest exports to South Korea could lend support.
Forties crude–the main grade used to set the major physical Brent benchmark–has been the main North Sea grade shipped to Asia in recent months.
– Sarah Kent, Dow Jones Newswires