South Korea envoy to visit Kazakhstan, Oman and Saudi Arabia to secure oil supplies

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SEOUL – South Korean presidential chief of staff Kang Hoon-sik said on April 7 he would travel to Kazakhstan, Oman and Saudi Arabia to secure supplies of crude oil and naphtha amid disruptions to shipping through the Strait of Hormuz.

He would depart later on April 7 as President Lee Jae Myung’s special envoy to hold talks with governments, energy firms and ship operators to ensure cargoes reach domestic ports and support stable supplies of key goods, including medical products, he added.

South Korea urgently needs to diversify supply lines as the country relies on the Hormuz strait route for about 61 per cent of its crude oil and 54 per cent of its naphtha imports, he told a press briefing at the presidential Blue House.

Mr Kang said shipments of crude oil and naphtha secured in March from the United Arab Emirates under a 24-million-barrel supply deal had already started arriving at South Korean ports.

While the UAE deal had been aimed at easing short-term supply concerns, he added that his latest trip is focused on securing longer-term supplies, according to local media.

The government is working with international partners to ensure the safe passage of 26 South Korean-flagged vessels currently waiting inside the Strait of Hormuz, he said.

Mr Kang urged households and businesses to actively take part in energy-saving measures to help the country weather tight supply conditions.

Separately, presidential policy adviser Kim Yong-beom said South Korea had secured about four months’ worth of helium supplies for the semiconductor industry, local media reported.

Helium, critical for industries such as semiconductors, is a byproduct of liquefied natural gas processing.

South Korea has scrambled to diversify its energy sources in recent weeks, as it imports about 70 per cent of its crude oil from the Middle East, leaving the country highly exposed to supply disruptions and sharp price swings.

Mr Yang Ki-wook, director-general of the Office of Industry, Trade and Resource Security at the trade ministry, said in a press briefing on April 7 the government had secured 110 million barrels of alternative crude oil supplies for April and May through 17 countries including Saudi Arabia and the United States.

That includes 50 million barrels for April and 60 million barrels for May sourced from countries that also include Brazil, Australia, Congo, Gabon and Canada, he added.

This would bring alternative supplies available to about 60 per cent of typical April demand and 70 per cent for May, he said, citing ministry data. 

Mr Yang said operating rates at local refineries had fallen by 10 per cent on average across the industry since the Iran war broke out.

Domestic supplies of naphtha had dipped by around 10 per cent to 20 per cent, he noted. REUTERS