Korea likely to avoid tapping oil reserves through May

Industry Minister Kim Jung-kwan, right, speaks during a meeting on the supply of petrochemical products in Seoul, April 2. Yonhap

Korea will be able to weather ongoing energy supply uncertainties without tapping oil reserves through April and May, Industry Minister Kim Jung-kwan said Sunday.

The government has secured sufficient crude oil supplies, supplemented by voluntary reserves held by private firms, according to the minister.

He said the government was compelled to release strategic reserves during the Russia-Ukraine war, but this time, conditions are more stable.

“We expect to pass through the coming months without taking such measures,” he said during on "Sunday Diagnosis," a weekly TV news analysis program.

Kim remained cautious regarding seven oil tankers currently delayed in the Strait of Hormuz, saying that “the situation remains unpredictable, while the government makes efforts to resolve the issue.”

As an alternative, the government is preparing to utilize routes through the Red Sea at Yanbu, a port city in Saudi Arabia. Kim noted that Korea’s Cheonghae Unit, including the Navy destroyer Dae Jo-yeong, may escort Korean vessels to ensure safe passage. He also emphasized that Saudi Arabian authorities have pledged to prioritize crude allocations for Korea.

Kim recently returned from a diplomatic trip to Kazakhstan with a government delegation led by presidential chief of staff Kang Hoon-sik. The visit focused on diversifying crude import sources, including from the U.S. and Kazakhstan.

The minister said discussions on importing crude from Kazakhstan have made substantial progress, with more detailed announcements expected soon.

The minister also expressed confidence in stabilizing supplies of naphtha, a key petrochemical feedstock. He expected the naphtha supply to recover to around 80 percent during April and May, supported by close daily monitoring in coordination with the industry.

To support affected businesses, the government has allocated 869.1 billion won ($585 million) in a supplementary budget for supply chain stabilization. This includes measures to offset the cost gap in naphtha imports, as some companies have found it more economical to suspend operations due to high import costs.

Kim also said that there are still adequate supplies of helium gas — essential for semiconductor manufacturing — thanks to U.S. imports secured through the end of June, ensuring uninterrupted factory operations.

He stressed the importance of energy conservation, calling it a shared national priority. The minister pledged that the government would use the current challenges as an opportunity to strengthen its long-term resilience.