The government said it is considering a method to reduce the number of mandatory private stockpile days ahead of the joint release of strategic oil reserves agreed with the International Energy Agency (IEA) on Aug. 9.
Yang Gi-uk, director general for industrial resource security at the Ministry of Trade, Industry and Resources, said at a daily briefing on the Middle East situation on the 26th that "we do not feel much need to release government oil reserves."
Initially, the government had planned to release reserves around April. But as the Middle East crisis drags on and refiners steadily secure crude supplies, officials are being cautious about the timing of a release.
This is assessed to be due to the government's "strategic oil swap" program, under which reserves are lent to private refiners. The contracted volume is about 20 million barrels, with actual deliveries reaching about 15 million barrels.
The Deputy Minister said, "There are two IEA-standard ways to release reserves," adding, "direct release of government reserves and an indirect supply increase by reducing the private mandatory stockpile."
She added, "A substantial volume has been supplied to the market through swaps," and "for the time being, we are using swaps and reviewing IEA joint-release options such as adjusting the number of private mandatory stockpile days. Direct release of government reserves is a last resort."
Meanwhile, the government said diversification of crude import sources is showing results. According to the Ministry of Trade and Industry (MOTI), the share of non-Middle Eastern crude imports (provisional) reached 51.5% from May to July. That is up about 20 percentage points from the same period last year (30.9%), and it is the first time the share has topped 50%.