Ulsan: The government has initiated an audit of the Korea National Oil Corp. (KNOC) following the company's failure to exercise its priority purchase rights for 900,000 barrels of foreign-owned crude oil stored in South Korea. This lapse resulted in the overseas sale of the oil stockpile, officials have announced.
According to Yonhap News Agency, the 900,000 barrels of oil were part of an international joint oil stockpile maintained at a reserve in Ulsan by an unidentified foreign company. The Ministry of Trade, Industry, and Resources reported that KNOC did not utilize its purchase rights, leading to the stockpile being sold internationally.
Under the international joint crude oil stockpiling program, KNOC had the opportunity to purchase the oil due to its agreement with the foreign company, which involved leasing domestic storage facilities for the oil. The ministry became aware of the situation while attempting to exercise purchase rights in response to a recent increase in the oil crisis alert level to Level 2, prompted by ongoing tensions in the Middle East.
A ministry official stated, "Currently, it is impossible to secure back the 900,000 barrels already sold overseas." This situation underscores the challenges faced in maintaining strategic oil reserves amid global uncertainties.