South Korea claims to have secured 60 million barrels of alternative oil supply for May

The South Korean government announced on Tuesday that it has secured an additional 60 million barrels of alternative oil supplies in May to compensate for disruptions in Middle Eastern oil supply caused by the actual closure of the Strait of Hormuz.

Deputy Minister of Trade, Industry and Energy Yang Ghi-wuk stated at a routine press conference that, so far, South Korea has obtained a total of 110 million barrels of oil from 17 countries, including Saudi Arabia, the United States, the United Arab Emirates, Brazil, and Canada, with 50 million barrels in April and 60 million barrels in May.

Regarding the crude oil swap mechanism launched last week, Yang said that South Korea’s four major refineries have submitted plans to borrow over 30 million barrels of crude oil, with about 8 million barrels to be delivered this week.

Under the crude oil swap mechanism, South Korean refineries can borrow crude oil from national reserves and return an equivalent amount once the imported crude arrives from abroad.

“The refineries have shown interest in the crude oil swap mechanism and are willing to utilize it,” he said.

Talking about naphtha — a key raw material in petrochemical production — Yang stated that he expects naphtha imports this month to reach 770k tons, about 70% of the same period last year’s imports.

He added that, combined with the domestic production of about 1.1 million tons, the total naphtha supply this month is expected to reach 80% to 90% of normal demand.

He said, “Once the additional budget is approved and the extra funds are in place, we will work with various companies to ensure the supply of naphtha.”