SEOUL, March 18 (AJP) — As the Middle East conflict continues to disrupt global energy supplies, the South Korean government Wednesday raised its crude oil security alert one notch to Level 2 ("Caution"), opening the way to direct intervention, including the possible release of strategic oil reserves.
The Ministry of Trade, Industry and Energy (MOTIE) announced the upgrade from Level 1 ("Interest") to Level 2 effective as of 3 p.m. local time (6am UTC) Wednesday.
This marks the Level 2 alert since the enactment of the National Resource Special Act early last year. The move follows the Level 1 alert for oil and gas issued on March 5, a few days after the conflict erupted.
South Korea’s resource security framework operates on a four-tier scale: Interest, Caution, Crisis, and Alert. Under the "Caution" stage, authorities can formally review and prepare for the release of national strategic stockpiles.
Spiking prices and shipping paralysis
MOTIE attributed the decision to heightened instability among major oil producers following the attack on Iran, the subsequent blockade of the Strait of Hormuz, and a nearly 40 percent surge in international oil prices.
Crude prices, which hovered between $60 and $70 per barrel until late February, skyrocketed following the outbreak on February 28.
As of 4 p.m. Wednesday, West Texas Intermediate (WTI) stood at $92 per barrel, while Brent crude reached $101. Most critically, Dubai crude—the benchmark for South Korean imports—surged to $129.9 on Monday, nearly doubling its pre-conflict levels due to its heavy reliance on the now-blocked Hormuz route.
Seoul is coordinating with the International Energy Agency (IEA) to establish a plan for releasing its allocated portion of 22.46 million barrels of strategic oil reserves. However, the ministry noted the timing and scale of the release will be subject to change based on private sector inventory levels and market trends.
Mandatory conservation and demand reduction
The government is also moving to enforce "mandatory energy conservation measures." These include strict indoor temperature limits for public institutions—set at a maximum of 28°C (82.4°F) in summer and 18°C (64.4°F) in winter.
Additional "mandatory demand reduction measures," such as a five-day rotation system for vehicles (prohibiting driving one day every five days), are also under active consideration.
President Lee Jae-myung Tuesday instructed his Cabinet to "swiftly establish diversified demand reduction measures, including the five-day or ten-day vehicle rotation systems, to encourage nationwide energy conservation."
Longer-term strategies involve securing oil supplies that are not delivered through the Strait of Hormuz. Currently, approximately 70 percent of the country’s oil imports—sourced from Saudi Arabia, the UAE, Kuwait, Iraq, and Qatar—must pass through the narrow waterway. MOTIE is exploring options to exercise preemptive purchase rights for international joint stockpiles as a potential contingency.
Gas alert remains at Level 1
Meanwhile, the alert for Liquefied Natural Gas (LNG) remains at Level 1 ("Interest"). Officials assessed that current LNG inventories remain sufficient, exceeding the legal requirement of nine days of supply. Most South Korean LNG firms currently hold between 10 to 14 days of reserves.
While the loss of imports from Qatar, South Korea’s second-largest LNG supplier, remains a concern, MOTIE emphasized that supplies from Australia—the nation's largest provider at over 30 percent—and other diverse sources can help mitigate the shortfall.
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