The South Korean government is pursuing the reintroduction of Russian crude oil imports, suspended since 2022, as the prolonged closure of the Strait of Hormuz due to U.S.-Iran conflict has triggered an emergency in securing Middle Eastern crude. Brent crude surpassed $108 during trading as attacks on energy facilities continued amid the Iran war.
According to government and refinery industry sources on the 18th, executives from major refiners including SK Energy, HD Hyundai Oilbank, S-Oil, and GS Caltex recently held a supply countermeasures meeting with the Ministry of Trade, Industry and Energy to discuss plans for importing Russian crude. During the meeting, ministry officials asked the refiners, "Would importing Russian crude help with supply?" and attendees reportedly expressed positive views.
A ministry official said, "It is true that the government is trying to support companies as the U.S. has permitted Russian crude imports," adding, "We are working to secure supply whether it's naphtha or crude oil." However, the official noted, "Actually securing vessels may not be easy either, making this a realistically challenging task." The U.S. recently permitted purchases of Russian crude oil and petroleum products for a limited 30-day period as international oil prices surged.
Supply concerns are spreading to the petrochemical industry. The blockade of the Strait of Hormuz has cut off naphtha supply, disrupting naphtha cracking center (NCC) operations. If NCC utilization rates fall or facilities shut down in the worst case, ethylene production would decline, potentially impacting the broader manufacturing sector. Petrochemical companies import naphtha from overseas while also receiving supply from domestic refiners, but procurement from both sources is currently difficult. Yeochun NCC declared force majeure earlier this month, while Lotte Chemical, Hanwha Solutions, and DL Chemical notified major customers of force majeure concerns. Force majeure is a measure to exempt sellers from liability when contract fulfillment becomes difficult due to external factors beyond the parties' control, such as war or natural disasters.
Some industry observers believe the period of late March to early April—two to three weeks after Yeochun NCC's force majeure declaration when inventories are depleted—could mark the peak crisis point for operational shutdowns.
According to ICE Futures Exchange data, Brent crude rose as much as 5% to $108.60 per barrel, while European natural gas benchmark prices surged up to 7.9%. The moves are attributed to Israel's attack on Iranian gas refining facilities and Iran's warning of retaliatory strikes on Gulf state energy infrastructure.
