South Korea will try to cut its reliance on Middle East crude imports to 50% by 2035, Reuters has reported, citing the country’s industry ministry.
The ministry has drafted a 10-year natural resource security plan, which envisages a “fundamental shift” in the way South Korea sources its imports. The plan also calls for a boost in oil reserves by some 20 million barrels by 2030.
South Korea imports as much as 70% of its crude oil from Middle Eastern producers, and most of it must pass through the Strait of Hormuz, the ministry said. The country also imports a lot of gas from the Middle East, although its dependence in gas is much lower, with Middle Eastern imports accounting for a fifth of the total last year. Over the next ten years, South Korea wants to ensure it does not rely on Middle Eastern producers for more than 30% of its gas imports.
South Korea is among the world’s most import-dependent nations when it comes to energy commodities and, as such, one of the first to feel the pinch from the closure of Hormuz. In March, soon after the war in the Persian Gulf began, Seoul had to set a ceiling on fuel prices—for the first time in three decades—to stabilize the market and shield the economy. The country also imposed driving limits for civil servants in March to handle the potential fuel shortages coming its way.
Since then, it has focused on diversifying its supplier network. The Hormuz crisis, however, has prompted Seoul to plan for the long term as well, as all large energy commodity importers rush to ensure more stable supply of vital goods not just in the wake of the Hormuz disruption but on a long-term basis.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com
- Norway’s Arctic Oil Pitch Falls Flat in Brussels
- US Gasoline, Distillate Inventories Continue to Fall as Crude Stocks Hold
- Trump Backs Diesel Export Ban as Prices Hit Record Highs
