The government will release strategic oil reserves in April and implement export restrictions on naphtha to address energy supply instability caused by a prolonged closure of the Strait of Hormuz. It also plans to launch a supply chain support center to conduct constant monitoring of items closely tied to people's daily lives.
Yang Gi-uk, director general for industrial resource security at the Ministry of Trade, Industry and Resources, said at a briefing of the response headquarters for the Middle East situation on the 23rd that "specific release criteria are being discussed with refiners, and there will be a separate announcement before the release," and stated accordingly.
The Ministry of Trade and Industry (MOTI) plans to give priority allocation of naphtha produced during the release of reserves to the domestic petrochemical industry. Deputy Minister Yang said, "We will release reserves in mid-April and simultaneously implement export restrictions, and we will distribute the naphtha generated from this evenly to petrochemical corporations."
About 55% of domestic naphtha demand is currently met by domestic refiners, with the remaining 45% dependent on direct imports from overseas. As supplies of Middle Eastern naphtha are cut off, concerns over shutdowns are growing among companies with high reliance on direct overseas imports. The government plans to minimize supply disruptions to these companies through emergency supply-demand adjustments with the cooperation of refiners.
Deputy Minister Yang said, "It's not impossible to source naphtha from elsewhere," but added, "The biggest problem is that prices keep rising." He continued, "We believe supply will be manageable through late April to early May. We will keep pushing this back through supply-demand adjustments," he said.
Authorities are also responding to the supply issue of ethylene gas, which the shipbuilding industry uses essentially for steel plate cutting. The Ministry of Trade and Industry (MOTI), in consultation with the chemical industry, has secured priority supplies of ethylene gas for shipbuilders. Park Dong-il, Deputy Minister for industrial policy at MOTI, said, "The volume used in the shipbuilding institutional sector is not large, so we expect to supply without disruption."
A monitoring system for supply chain stabilization also goes into full operation starting today. The Ministry of Trade and Industry (MOTI) is launching a 12-person "supply chain support center" and will first target 30 to 40 items closely linked to people's daily lives and industrial production, such as petrochemical products, for inspection. While identifying industry difficulties in real time to seek government-level solutions, it plans to flexibly expand the target items depending on how the situation evolves.
Deputy Minister Park said, "It is not appropriate to disclose each individual item subject to inspection, but petrochemical products are basic raw materials for nearly all manufacturing sectors, so the ripple effect is significant," adding, "We will respond meticulously with a sense of urgency."