Seoul: South Korea has reached an agreement to urgently import crude oil from the UAE. South Korea's presidential office announced on Wednesday that it has successfully negotiated a deal for the United Arab Emirates (UAE) to supply South Korea with 24 million barrels of crude oil, as the government begins implementing measures to mitigate the economic impact of the conflict in the Middle East. South Korean Presidential Chief of Staff Kang Hoon-sik announced after returning from the UAE that the UAE had pledged priority over South Korea, the world's fourth-largest oil importer, for crude oil shipments. He emphasized that no country would receive oil before South Korea.
According to Thai News Agency, while Mr. Kang confirmed plans for urgent oil imports of 18 million barrels, he did not specify a precise delivery timeline or details of the shipping route that would avoid the Strait of Hormuz, which is currently closed by Iran. This closure has forced the UAE to reduce its production by more than half, compounded by damage to the port of Fujairah from a drone attack.
Data from Kepler, a global shipping information provider, indicates that two large oil tankers carrying 4 million barrels of Murban crude, destined from the port of Fujairah, are scheduled to arrive in South Korea on March 29th and April 1st, respectively. The entire emergency import of 24 million barrels will be transported using three UAE-flagged ships and six South Korean ships.
Currently, South Korea imports almost all of its energy from abroad, with 70% of its crude oil and 20% of its liquefied natural gas (LNG) coming from the Middle East. It is also a major importer of naphtha, used in the petrochemical industry for the production of automotive parts, electronics, and construction materials.
Meanwhile, Finance Minister Koo Yoon-chol announced on the same day that the government had ordered restrictions on naphtha exports and temporarily designated it as an economic security commodity in the supply chain. He also announced plans to inject 1.5 trillion won (approximately 33.9 billion baht) in aid to affected petrochemical companies, supporting alternative import costs and offering special interest rates.
In addition, President Lee Jae-myung ordered contingency plans to be prepared to restrict car use if the crisis persists, as well as announcing price controls on fuel for the first time in almost 30 years. At the same time, he ordered the lifting of caps on coal-fired power generation and increased the utilization of nuclear reactors to 80 percent to reduce reliance on oil and natural gas.