As the prolonged Middle East war deepens the energy supply crisis, the Korean government's response is shifting its focus from "securing volumes" to "structural transformation." While the early-stage procurement of 24 million barrels of crude oil from the United Arab Emirates was a measure to ease short-term anxiety, analysts interpret the latest dispatch of Kang Hoon-sik, Presidential Chief of Staff, as a special envoy to Kazakhstan, Oman and Saudi Arabia as a move focused on long-term restructuring of crude oil supply chains.
The war supplementary budget currently under deliberation in the National Assembly also prioritizes "swift deliberation, finalization and execution." Kim Yong-beom, Senior Presidential Secretary for Policy, dismissed speculation about a second supplementary budget at a press briefing on the Middle East situation held at the Chunchugwan press center in the Presidential Office on Monday alongside Kang. "At this stage, that seems like getting too far ahead of ourselves," Kim said. "The current budget is sufficient to respond to the war's impact for about six months. Any further assessment should come after the supplementary budget has been faithfully executed," he added, drawing a clear line.
The government is also accelerating efforts to stabilize energy supply and demand. "Given our economy's characteristics — with dependence on imports through the Strait of Hormuz reaching 61% for crude oil and 54% for naphtha based on last year's figures — efforts to secure alternative supply lines are urgent until the Middle East situation is fully resolved," Kang said. "We have determined that we have now entered a prolonged phase of 'energy instability,'" he continued. "Unlike the 24 million barrels secured from the UAE, this envoy dispatch is aimed at preparing for long-term supply and demand."
Saudi Arabia, one of the three countries to which Kang was dispatched as special envoy, is the world's largest oil-producing nation. Volumes can be secured through Red Sea routes, and utilizing direct ports on the Arabian Sea such as Duqm in Oman could also reduce risks associated with the Strait of Hormuz. Kazakhstan is interpreted as a long-term strategic move aimed at supply chain diversification. Kang explained that "the government's policy direction is to pursue energy source diversification through diversification of supply and renewable energy."
Efforts to secure alternative crude oil are also gaining pace. In a daily briefing by the "Middle East War Response Headquarters," the Ministry of Trade, Industry and Energy said, "We are importing alternative crude oil from 17 countries including Saudi Arabia, the United States, Brazil, Australia, the Congo, Gabon and Canada." The ministry added, "We have secured approximately 60% and 70% more alternative crude oil this month and next month, respectively, compared to previous years." The ministry also stated that "the projected April import volume for light naphtha, primarily used domestically, is 770,000 tons — approximately 70% of last year's import volume — and including domestic production, supply is approaching 90%."
However, a rise in international oil prices is seen as inevitable due to the impact of the Strait of Hormuz blockade, making it difficult to avoid price burdens. Kim said the supplementary budget includes 480 billion won ($350 million) "to subsidize up to 50% of naphtha costs." Regarding the 26 Korean vessels currently waiting near the Strait of Hormuz, Kang said, "This is a matter that requires multiple international entities to work together, so it will inevitably take time." He added that "the vessels currently have approximately two weeks' worth of food supplies secured."