The Wednesday deal among the members of the Organization of Petroleum Exporting Countries to cut oil output by about 1 percent of the global oil production has brightened up prospects for South Korea’s exports.
 

While the OPEC deal is expected to push global oil prices up to about $60 per barrel from the current mid-$40 levels, oil price hikes will be positive for Korean exporters of petrochemical and refinery products, a government official said.

The price of Dubai crude, South Korea’s benchmark, plummeted to an average of $50.7 per barrel in 2015 from $96.6 in 2014.

“Due to low levels of global oil prices, the demand in emerging markets such as the Middle East and Russia had been weak. Oil price hikes will be a plus to exports to emerging markets,” Chae Hee-bong, deputy trade minister for energy and resources policies, said at a press briefing.

Petrochemical and refinery products account for 17 percent of Korea’s exports, which rebounded with 2.7 percent on-year growth in November.

The Bank of Korea in October had expected that oil prices would go up to $49 per barrel in 2017 from an estimate of $41 this year, raising export prospects next year.

By Kim Yoon-mi (yoonmi@heraldcorp.com)