Seoul: South Korea is cautiously evaluating the timing of releasing its oil stockpile under the International Energy Agency (IEA) agreement due to concerns about a potential global oil crisis in August, according to an industry ministry official.
According to Yonhap News Agency, earlier this year, Seoul committed to releasing 22.46 million barrels of oil from its strategic reserves by June 9. This decision was part of a joint plan by 32 IEA member nations aimed at addressing disruptions in oil markets triggered by the U.S.-Israeli conflict with Iran in late February. However, Yang Ghi-wuk, deputy minister for trade, industry, and resources security, stated during a regular press briefing that the government is cautiously determining the timing of the release as it should be a "final" measure for the worst-case scenario.
Concerns over a possible oil crisis have slightly eased with reports suggesting an improvement in the Middle East situation. Still, projections indicated potential disruptions in oil supplies if the effective closure of the Strait of Hormuz continues. IEA Executive Director Fatih Birol warned last week about the rapid depletion of commercial oil inventories, suggesting that oil markets could enter a "red zone" by July or August.
Yang noted that the government currently sees no urgent need for an oil release due to the country's efforts in securing alternative supplies and the crude swap system with private firms. He emphasized that while South Korea tries to adhere to the IEA's plan, it is not obligatory, and the timing and method of the release can vary by country.
The industry ministry reported that South Korea's crude oil supplies remain relatively stable, with about 85 percent of pre-Iran war supplies secured for July. Additionally, the combined share of oil supplies tentatively secured from regions outside the Middle East for the May-July period increased to 51.5 percent, a significant rise from 30.9 percent last year. The share of shipments from North and South America rose to 35.6 percent from 23.1 percent, with shipments from Asia and Africa also showing notable increases.