South Korea has arranged for an additional 60 million barrels of alternative oil supplies for May to substitute the Middle East supplies affected by the closure of the Strait of Hormuz, as announced by the government. This brings the total secured oil to 110 million barrels, with 50 million for April and 60 million for May, sourced from 17 countries including Saudi Arabia, the United States, and Canada, among others, according to Yang Ghi-wuk, the deputy minister for trade, industry, and resource security.
The secured oil for April and May each accounts for approximately 60% and 70% of South Korea’s usual monthly oil supplies, respectively, in normal circumstances. Yang mentioned that the country’s major four refiners have submitted plans to borrow over 30 million barrels under the oil swap system, with an initial delivery of about 8 million barrels expected this week.
South Korean refiners can now borrow crude oil from the national reserve under the oil swap system and return the same volume once their crude supplies from overseas arrive, Yang explained. He noted that refiners have shown interest in this system and are prepared to make use of it. Additionally, Yang highlighted expectations for naphtha imports, a key raw material in petrochemical manufacturing, to reach 770,000 tons this month, equivalent to around 70% of last year’s imports for the same period.
The total naphtha supply is projected to meet about 80 to 90% of the monthly demand under normal circumstances, including approximately 1.1 million tons produced domestically. Yang stated plans to collaborate with companies to secure naphtha supplies once the supplementary budget is approved and the extra budget is allocated.
