South Korean refiners faced with weak margins want to cut costs by diversifying away from their traditional crude suppliers in the Middle East, and U.S. condensate could be an attractive option now that a long-standing U.S. export ban has been eased. South Korea has the fourth-largest refining capacity in Asia Pacific at 2.9 million barrels per day (bpd) but crude operating rates have been cut this year to cap refining losses, while secondary units that use much cheaper fuel have produced more. Earlier this month the country’s second-largest refiner, GS Caltex Corp, received the first cargo of ultra-light oil, or condensate, from the United States since the softening of the ban. Top refiner SK Energy Co Ltd is also expecting U.S. condensate soon. A source at GS Caltex and other refining industry sources told Reuters GS Caltex had found U.S. condensate had a satisfactory yield of light oil products. “We are processing it now ... Using U.S. condensate is expected to stabilise overall costs at lower levels,” a source at GS Caltex said, declining to be identified. “We will continue to consider it if the economics remain attractive.” A spokesman at GS Caltex, a joint venture between GS Holdings and Chevron Corp, declined comment. Seoul imported 612.5 million barrels of crude in the first eight months of this year, up just 0.2 percent from a year earlier, data from state-run Korean National Oil Corp showed. Imports from the Middle East accounted for 84 percent of the total at 513.8 million barrels, down 0.8 percent from the same period last year. European cargoes rose 11 percent to 20.6 million barrels and shipments from Africa more than quadrupled to 16.2 million barrels. Washington is facing growing pressure to ease its ban on crude oil exports, with South Korea and Mexico joining the European Union in pressing the case, but it has held back from issuing more export licences while the issue is debated by domestic producers and consumers. A spokeswoman at SK Innovation Co Ltd, which owns SK Energy, said the company wanted to diversify crude because of the difficult business climate. “Our African oil imports have been greatly buoyed by our diversification efforts. We are also raising European oil imports,” she said. “Canadian oil is too heavy to refine at our units, leaving the United States as the only option in North America.” She said SK Energy’s Middle Eastern crude imports had fallen to a record low of just above 70 percent of the total this year, compared with around 85 percent for South Korea traditionally. S-Oil Corp, the third biggest of South Korea’s four refiners, whose main shareholder is Saudi Aramco, imports almost all of its crude from Saudi Arabia. Another Seoul-based refining source said: “We’ll definitely consider U.S. condensate imports if tendered, as we expect prices to come under pressure if cargoes flood the market.” “Local refiners are looking everywhere, from Africa to North and Latin America, where they haven’t imported much oil from, in order to diversify,” he said. “Local companies are even looking as far as Russia.” South Korea imposes no import tariffs on oil from the United States, Canada and Europe because of free trade agreements.