S. Korea Weighs Timing Of Oil Release Amid Possible August Supply Crisis

SEOUL, May 26 (Bernama-Yonhap) -- South Korea is taking a cautious approach to the timing of its oil stockpile release under an agreement among International Energy Agency (IEA) members amid concerns over a possible global oil crisis in August, an industry ministry official said Tuesday, Yonhap News Agency reported.

Earlier this year, Seoul pledged to release 22.46 million barrels of oil from its strategic reserves by June 9 under a joint plan adopted by 32 IEA member nations as part of efforts to help address disruptions in oil markets sparked by the United States (US)-Israeli war against Iran in late February.

But Yang Ghi-wuk, deputy minister for trade, industry and resources security, told reporters at a regular press briefing that the Seoul government is cautiously determining the timing of the release, as the option should be used only as a “final” card in the worst-case scenario.

“Concerns over a possible oil crisis have somewhat eased recently with news that the situation in West Asia may improve, but until just a few days ago, there were projections that oil supplies could face disruptions if the effective closure of the Strait of Hormuz continued for longer,” he said.

IEA Executive Director Fatih Birol warned last week that commercial oil inventories are depleting at a “very fast” pace, noting that oil markets could enter a “red zone” in July or August.

Yang said the government does not currently feel much need for an oil release, thanks to the country’s efforts to secure alternative supplies and the crude swap system with private firms.

“We are trying to adhere to the IEA's plan as much as possible, but it is not an obligation or something for which we could be penalised,” he explained, adding that the timing and method of the release could differ by country.

The industry ministry has said South Korea's crude oil supplies remain relatively stable for now, with about 85 per cent of pre-Iran war supplies secured for use throughout July.

Meanwhile, the combined share of South Korea's oil supplies tentatively secured from regions outside West Asia for use during the May-July period reached 51.5 per cent, sharply up from the 30.9 per cent recorded last year, according to the ministry.

The share of shipments from North and South America increased to 35.6 per cent from 23.1 per cent over the same period, while shipments from Asia rose to 7.4 per cent from 5 per cent.

Shipments from Africa expanded to 8.3 per cent from 2.2 per cent, the latest findings showed.

-- BERNAMA-YONHAP