At a daily briefing at the government complex in the administrative city of Sejong, Yang Gi-uk, a ministry official, said the government is "releasing stockpiles" for refiners.
Yang said Middle Eastern crude makes up the largest share of the government's stockpiles, and that South Korea holds more than 20 million barrels, which he said should be sufficient.
The program aims to ease supply disruptions by lending government oil reserves to refiners, who will be required to replenish them once they have secured their own supplies.
Under the program, which runs for two months and could be extended if necessary with the ministry's approval, refiners, who have faced difficulties importing Middle Eastern crude due to the closure of the Strait of Hormuz, will be able to secure substitute supplies. Monthly settlements will be calculated based on price differences between government stockpiles and refiners' secured supplies.
Amid supply disruptions from the Middle East, most refiners have turned to Africa, Australia, Central Asia, and the Americas for oil , with shipments taking 14 to 50 days.
According to the ministry, the country's four major refiners have applied for the program, with a decision to be made after the Korea National Oil Corporation verifies their applications and assesses feasibility before releasing stockpiles.
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