Hyundai Oilbank said it has signed a long-term supply agreement with PMI, the commercial arm of Mexico’s state-run oil company Pemex, to provide 2.1 million barrels of gasoline in the first half of next year.

It is the first Korean refiner to strike a long-term deal with the Mexican state-run oil company to carry out transactions directly between the parties without traders involved as under spot-market deals. A long-term direct contract with a buyer is a boon for refiners because consistent terms of trade are guaranteed throughout the contract period, saving the trouble of coping with the volatility they would face in the spot market. Hyundai Oilbank indicated this contract with PMI is all the more meaningful considering how this can also serve as a stepping stone for further deals with Latin American countries down the road.

In a relentless pursuit of opportunities in Latin America as part of its long-standing efforts to find new export outlets, Hyundai Oilbank has been occasionally supplying gasoline since 2015 to several countries within the area including Mexico, Guatemala and Ecuador. Of these markets, the refiner has placed a particular focus on Mexico for a long-term deal based on the reasonable expectation that the country’s rapidly aging refining facilities would give rise to a significant demand for imported gasoline, and is now taking a step further to make all-out efforts to secure a multi-year term deal in the second half of next year.

Hyundai Oilbank is continuously making inroads into new markets beyond Asian countries, its traditional export destinations. Since 2013, it has supplied each year more than 5 million barrels of gasoline to New Zealand, which accounts for 25% of the nation’s annual gasoline consumption and 54% of the imported volumes. Last year, Hyundai Oilbank also signed a deal with the Republic of South Africa to provide up to 1.2 million barrels of gasoline by the end of this year.

“Once the largest importer of Korea’s oil products, China is now poised to turn into an exporter with its expanded refining capacity,” said an official of Hyundai Oilbank. “Against this backdrop, Korean refiners are making continued efforts to diversify their markets.”

Figures show Hyundai Oilbank’s commitment to exploring new markets: whereas Asia’s share of the refiner’s total gasoline exports reduced by 20% points from 77% in 2013 to 57% in 2018, the respective shares of Oceania and the Americas rose from 18% and 4% to 29% and 13% over the same period.