South Korea has secured 273 million barrels of Middle Eastern and Kazakh crude that will not need to transit the Strait of Hormuz—volumes that would sustain its economy for more than three months.
“The 273 million barrels of crude oil, based on last year’s consumption levels, are sufficient to sustain the economy for more than three months under normal operating conditions without the need for additional emergency measures,” presidential chief of staff Kang Hoon-sik said Wednesday.
Kang has just returned from a week-long tour to Oman, Saudi Arabia, Qatar, and Kazakhstan in a bid to secure energy supplies for the resource-poor South Korea, which is Asia’s fourth-largest economy.
The country has also secured 2.1 million tons of naphtha, a key feedstock for the petrochemical industry, the presidential chief of staff added.
“The crude oil and naphtha will be shipped through alternative routes not affected by the blockade of the Strait of Hormuz,” the official added, as quoted by the Yonhap news agency.
Asia’s petrochemicals industry is already feeling the crunch. Across Asia, shortages of naphtha and other key petrochemicals feedstocks due to the Iran war have already forced petrochemicals firms to curb output.
Based on last year’s consumption numbers, the 2.1 million metric tons of naphtha would be enough to meet about one month of demand, according to Kang.
To ensure stable energy supply in the future, South Korean officials also discussed with major Middle Eastern oil producers ideas to set up crude oil storage facilities outside the Strait of Hormuz.
Before the war began, South Korea imported most of the crude it consumes from the Middle East and is one of the most exposed Asian importers to Qatari LNG, which is now offline.
Meanwhile, South Korea is pushing back the retirement of coal-fired power generation capacity amid the oil and gas shock caused by the Middle East war.
By Tsvetana Paraskova for Oilprice.com
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