Due to concerns over naphtha supply and demand, considering issuing an emergency order to redirect exports to domestic demand
Despite the easing of US sanctions, the introduction of Russian crude oil is ‘cautious’… Oil refinery “quality and financial risks”
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(Sejong = Yonhap News) Reporter Shin Chang-yong = As Iran’s blockade of the Strait of Hormuz is prolonged, rumors of an ‘April crude oil supply and demand crisis’ are increasing, but the government announced that there will be no major problems with supply and demand by securing replacement supplies and releasing oil from reserves.
In particular, they made it clear that the fear of a ‘shutdown’ in the petrochemical industry due to a blockage in the supply of naphtha and a sharp rise in prices could be managed through strong adjustment orders, such as diverting export volumes from oil refineries to domestic demand.
Yang Ki-wook, director of the Ministry of Trade, Industry and Energy’s Office of Industrial Resources and Security, said in a daily briefing at the Sejong Government Complex on the 23rd that “the recent pace of increase in international oil prices, with Dubai oil hitting $158, is an unprecedented situation in which it is rising more steeply than during the Russia-Ukraine war in 2022.”
However, Director Yang emphasized that there were no particular problems with domestic crude oil supply and demand in April.
He explained, “Each oil refinery is securing supplies through alternative routes that bypass the Strait of Hormuz. Of the 24 million barrels scheduled to be introduced from the United Arab Emirates (UAE), 4 million barrels will arrive twice in late March and April 1, and 18 million barrels are also scheduled to begin entering the port in early to mid-April.”
Director Yang repeatedly emphasized, “It is true that the amount of crude oil introduced in April is lower than usual, but replacement supplies are steadily coming in and the release of reserve oil is planned for mid-April, so there is no particular problem with overall supply and demand.”
The government is monitoring private crude oil inventory trends in real time. Based on this, preparations are being made to release oil reserves in mid-April, when private stocks are expected to be depleted.
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Director Yang said that domestic oil refineries are cautious about the introduction of Russian crude oil, which has recently attracted attention.
The United States’ temporary sanctions relief on the 12th opened the possibility of trading Russian crude oil and petroleum products floating on the high seas, but domestic oil refineries are said to be very cautious about introducing it due to quality issues, financial settlement risks, and concerns about secondary boycotts (third-party sanctions).
The government also proposed a solution for the petrochemical industry, which is highly concerned about shutdowns due to a lack of naphtha supply.
Director Yang said, “We plan to redirect export volumes to the domestic market in consultation with oil refineries, which account for about 55% of domestic naphtha supply,” and drew the line, “If an emergency supply and demand adjustment order is issued, the crisis of shutdowns can be sufficiently delayed until the end of April or May, so there will be no disruption in supply and demand.”
In addition, reflection in the supplementary budget is being pursued to support additional costs incurred when importing alternative naphtha.
In addition, as for the disruption in the supply and demand of ethylene gas for cutting steel materials, which was a concern in the shipbuilding industry, he explained, “The usage is not large, and through coordination between the chemical and shipbuilding industries, we are supplying without disruption in the order of the highest reserve depletion rate.”
In order to closely manage supply chain risks across industries, the government established the ‘Supply Chain Support Center‘ at the Seoul Government Complex and began full-scale operation from this day.
A total of 12 dedicated personnel will be deployed to intensively monitor 30 to 40 key items closely related to industrial production and people’s lives.
Dong-il Park, head of the Industrial Policy Department at the Ministry of Trade, Industry and Energy, said, “The government will respond with a sense of tension, but manage it meticulously and calmly to avoid market confusion or hoarding due to overrepresentation of the crisis in certain items. We will flexibly expand the items under management as the situation changes.”
changyong@yna.co.kr
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Sent at 11:30 on March 23, 2026
