The Ministry of Trade, Industry and Resources and Japan's Ministry of Economy, Trade and Industry said on the 19th they will build a system to exchange crude oil and liquefied natural gas (LNG) supplies in emergencies and jointly respond when disruptions hit key industrial supply chains. The move follows a summit in Andong, North Gyeongsang, where President Lee Jae-myung and Japanese Prime Minister Sanae Takaichi agreed to strengthen cooperation on energy security and supply chains.
First, in crude oil and petroleum products, the two countries agreed to establish a swap system to flexibly share volumes when either side faces a supply disruption. They also agreed not to unnecessarily block exports to each other during crises. They will also cooperate in crude oil procurement and transportation.
They will also expand cooperation in LNG. Korea is the world's No. 3 LNG importer and Japan is No. 2. Working together would allow the two countries to respond far more flexibly to supply chain disruptions. Earlier, Korea Gas Corporation (KOGAS) and Japanese energy corporations JERA signed an agreement on LNG supply and demand cooperation in Tokyo on Mar. 14. The two ministries agreed to broaden government-level discussions on cooperation based on that agreement.
They also agreed to upgrade supply chain cooperation. Minister Kim Jung-kwan of the Ministry of Trade and Industry (MOTI) signed the Korea-Japan Supply Chain Partnership Arrangement with Akazawa Ryosei, Japan's vice minister of economy, trade and industry, on Mar. 14. Building on this, the two ministries will further refine a system to enable rapid joint responses during supply chain crises.
They will also pursue cooperation at the Asia-wide level. Through Japan's proposed "POWERR Asia" initiative to strengthen Asia's energy and resources supply chains, the two countries will seek ways to boost regional supply chain resilience across various areas, including energy stockpiling.
To implement the agreement, the two ministries will launch a new high-level, regular "Industry and Trade Policy Dialogue," where senior officials will meet on a routine basis.