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Key Points

South Korea is preparing to release emergency oil reserves as Iran threatens to shut down the Strait of Hormuz, a vital oil shipping route. The Korea National Oil Corporation has activated 24-hour monitoring and inspected stockpiles, which can last over 200 days. The strait handles 20% of global oil shipments, raising fears of a supply shock. KNOC has also secured priority purchase agreements with major oil firms to mitigate disruptions.

Key Points: South Korea Prepares Oil Reserves Release Over Hormuz Strait Threat

  • South Korea monitors oil markets amid Iran's Hormuz closure threat
  • KNOC inspects reserves, enough for 206.9 days
  • Strait transports 20% of global oil daily
  • Seoul secures priority purchase deals with global firms
2 min read

Seoul prepares for possible release of oil reserves amid threats to close Hormuz strait

Seoul readies emergency oil reserves as Iran threatens to close the critical Hormuz Strait, risking global supply disruptions.

"We began 24-hour monitoring of changes in international oil prices and the circumstances surrounding the domestic and overseas petroleum markets. – KNOC"

Seoul, June 23

The state-run Korea National Oil Corporation (KNOC) said on Monday it is closely monitoring the global oil supply and preparing for the possible release of oil reserves following reports that Iran is pushing to close the Strait of Hormuz.

"We began 24-hour monitoring of changes in international oil prices and the circumstances surrounding the domestic and overseas petroleum markets, while checking our step-by-step response system," the KNOC said in a press release.

The KNOC added it has conducted an emergency on-site inspection to prepare for possible release of national oil reserves, reports Yonhap news agency.

South Korea currently has oil reserves that could last approximately 206.9 days, well above the recommended volume by the International Energy Agency, according to the KNOC.

Concerns have been growing over possible disruptions in global oil supply after Iran's state-run Press TV reported that the country's parliament approved a plan to close the Strait of Hormuz, a key waterway for shipping crude oil from the Persian Gulf to the rest of the world, in response to attacks on Tehran's nuclear facilities by Israel and the United States.

The Hormuz strait transports about 20 million barrels of oil on a daily average, which accounts for about 20 percent of global oil consumption, according to a recent report by the U.S. Energy Information Administration.

To respond to potential oil shock, the KNOC has signed multiple joint stockpiling agreements covering a combined 23.13 million barrels with seven global oil companies, including those in the Middle East, and secured priority in purchasing contracted volume in the event of disruptions in oil supply.

"As a state-run oil company at the forefront of crisis response, the KNOC will thoroughly check our readiness and come up with a meticulous execution plan for emergency measures to respond to a possible energy crisis," Kim Dong-sub, president and CEO of the KNOC, said.

- IANS

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Reader Comments

R
Rajesh K.
This situation shows why India needs to diversify its energy sources. We're too dependent on Middle East oil. Time to invest more in renewables and domestic production! 🇮🇳
P
Priya M.
South Korea's preparedness is impressive with 206 days of reserves. I wonder how many days India has stored? This crisis could impact petrol prices here too 😟
A
Amit S.
While Iran has legitimate security concerns, blocking Hormuz would hurt developing economies like India the most. Diplomacy is the only way forward. Hope our government is engaging with all sides.
S
Sunita R.
Another reason to push for electric vehicles in India! We can't keep being at the mercy of global oil politics. Our metro cities need better EV infrastructure ASAP.
V
Vikram J.
Interesting that South Korea has agreements with Middle East companies. India should also strengthen such strategic partnerships to secure our energy needs in crisis times.
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Neha P.
The timing couldn't be worse with summer travel season and upcoming festivals. If oil prices spike, it will affect everything from transport to essential goods. Government should prepare contingency plans.

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