South Korea secures oil and naphtha supplies to stabilise the economy for more than three months.
SEOUL – South Korea has secured 273 million barrels of crude oil from the Middle East and Kazakhstan that do not need to pass through the Strait of Hormuz, a volume considered sufficient to support the country’s economy for more than three months under normal conditions.
Presidential chief of staff Kang Hoon-sik said on Wednesday that the 273 million barrels, based on last year’s consumption levels, would be enough to sustain the economy for over three months without requiring additional emergency measures.
As reported by Oilprice, Kang had just returned from a week-long visit to Oman, Saudi Arabia, Qatar and Kazakhstan, aimed at securing energy supplies for South Korea, Asia’s fourth-largest economy and one that is highly dependent on energy imports.
In addition to crude oil, South Korea has also secured 2.1 million tonnes of naphtha, a key feedstock for the petrochemical industry.
The official said all of the oil and naphtha would be transported via alternative routes unaffected by disruptions in the Strait of Hormuz.
Asia’s petrochemical industry has already begun to feel the strain from supply disruptions. Shortages of naphtha and other feedstocks linked to the Iran conflict have forced some companies to scale back production.
Based on last year’s consumption, the 2.1 million tonnes of naphtha are estimated to meet around one month of domestic demand in South Korea.
To ensure long-term supply stability, South Korean officials have also discussed with major Middle Eastern oil producers the possibility of building oil storage facilities outside the Hormuz region.
Before the conflict, South Korea relied heavily on Middle Eastern oil imports and was among the Asian countries most vulnerable to disruptions in liquefied natural gas (LNG) supply from Qatar, which has also been affected.
Meanwhile, South Korea has delayed plans to retire coal-fired power plants amid mounting energy crisis pressures triggered by the conflict in the Middle East. (DK/ZH)
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