South Korea to Lend Strategic Petroleum Reserves to Companies

The South Korean government announced on March 31 that it would begin lending strategic petroleum reserves to companies in need, effective immediately, to ensure a stable supply for upstream companies such as refineries. Just one day earlier, South Korean President Lee Jae-myung warned that the current energy situation might be more severe than expected, causing him to “lose sleep.”

According to Yonhap News Agency, citing the Ministry of Trade, Industry and Energy, refineries and other companies in need can borrow crude oil from the government for the next two months. The loaned crude oil comes from South Korea’s strategic reserves, mainly from the Middle East. These companies will repay the government after obtaining crude oil from other sources. The South Korean government hopes this will ensure stable operation of refineries and postpone the release of strategic petroleum reserves.

An official from the Ministry of Trade, Industry and Energy said at a press conference that day that four companies had applied to borrow a total of 20 million barrels of crude oil. The South Korean government decided to approve one company’s application later that day, lending 2 million barrels of crude oil. It is reported that South Korean companies are currently planning to obtain crude oil from producing regions in Africa, Central Asia, the Americas, and Australia. Lee Jae-myung emphasized the necessity of a swift transition to renewable energy at a government meeting in Jeju Island on March 30. He said, “The whole world is in chaos because of energy issues.”