Korea is moving to expand its strategic oil storage capacity as prolonged disruptions around the Strait of Hormuz are prompting a surge of inquiries from oil-exporting nations seeking to use Korea’s storage facilities.

“We are reviewing a plan to expand our current storage capacity of about 140 million barrels by an additional 20 million,” Yang Ki-wook, director-general for industry, trade and resource security at the Ministry of Trade, Industry and Resources, said Tuesday at a press briefing at the Sejong government complex.

“We are already in talks with the United Arab Emirates [UAE], and other Middle Eastern countries have also shown interest.”

For producers in the region, recurring geopolitical tensions have underscored the Strait of Hormuz’s vulnerability, prompting a shift toward storage hubs in Northeast Asia as a hedge against supply disruptions.
Middle Eastern countries would be hit even harder than Korea if the strait were blocked,” Yang said, noting the heavy reliance of countries such as Saudi Arabia, the UAE and Kuwait on crude exports.

“From their perspective, storing oil outside the strait and selling it later helps mitigate risk.”

Under the joint stockpiling program, foreign companies store crude in Korea’s facilities in leases, which also grants Seoul preferential purchasing rights in times of supply stress. Korea National Oil Corporation has nine oil storage facilities nationwide, managing reserves equivalent to 116.5 days of consumption.

Yang also said such a program has helped it secure alternative supplies more swiftly in the past few months amid the war.

“Joint stockpiling was not a formal condition, but there were requests from partner countries,” Yang said. “In the case of the UAE, it appears to have facilitated securing replacement volumes.”

“Stockpiling is not merely about buying oil when prices are low, but a strategic asset directly tied to securing alternative supplies in times of crisis,” Yand added. “We will strengthen its practical role in stabilizing supply by aligning it more closely with domestic industry demand.”

Korea has secured roughly 118 million barrels of alternative crude from 17 countries, including Saudi Arabia, the UAE and the United States, for April and May, equivalent to about 82 percent of typical import levels before the war.

The government is also operating a swap program that lends strategic reserves to refiners. Korea’s big four refiners — SK Energy, GS Caltex, HD Hyundai Oilbank and S-Oil — have applied to swap a combined 32 million barrels, with 17 million barrels allocated for April.

“Six contracts totaling 8.38 million barrels are already being delivered to refineries, and an additional 8 million barrels are expected to be contracted within this month,” Yang added.
Source: Korea JoongAng Daily