The price of the world’s most important oil benchmark is being boosted by South Korean refiners buying on the back of a tax loophole involving North Sea oil.
The buying pressure started in December when refiners began exploiting the EU-South Korea free trade agreement signed in 2011, but, according to industry estimates, has now peaked with the Asian country’s refiners in May buying more than a quarter of the monthly production of Forties, the oil variety that largely sets the price of the Brent benchmark.
The purchases have supported the price of Brent in spite of weak domestic European demand for the different varieties of crude oil produced in the North Sea. This week Brent fell to a 15-month low of $95.64 a barrel, but yesterday it recovered to breach the crucial $100-a-barrel mark, in part helped by new Korean buying.