Market Update: Gov’t may impose export restrictions amid crude oil supply emergency: Vice minister – Full Analysis

 

Korea remains in an “emergency situation” in terms of the country’s crude oil supply, a senior official assessed Friday, noting the government may adjust oil supplies by refineries or impose export restrictions on related products.

 

Vice Industry Minister Moon Shin-hak made the remarks in an interview with radio broadcaster CBS, as concerns mount over possible disruptions in oil supplies starting next month with the continued closure of the Strait of Hormuz, a key global oil export route.

 


 

“We need to consider various options on how to respond in an emergency situation,” Moon said while responding to a question on the government’s oil supply management.

 

Regarding the country’s oil reserves, Moon said there have been reports that Korea has enough reserves to last 208 days, but under a business-as-usual scenario that fully supports current economic activity, the reserves would not last that long.

 

Korea is known to hold a combined 190 million barrels of oil reserves.

 

Moon said the government can issue an order for oil refineries to adjust their oil supplies and impose export restriction measures if the situation worsens, explaining that half of the country’s oil imports are normally distributed to the market, and the other half processed and exported to other countries.

 

“We first need to make sure there is no disruption to the minimum level of people’s economic activities, and second, prevent interruptions in production activities of the industrial sector.”

 

Earlier this week, Seoul raised the alert over a possible disruption in crude oil supply by a notch to Level 2 in its four-tier national resource security crisis warning system.

 

The Level 2, or yellow, alert is issued when the country is expected to see disruptions in oil imports due to high volatility in the global market.

Yonhap