The Korea Trade Insurance Corporation (K-Sure) has partnered with global raw materials trading company Trafigura to support domestic companies in securing crude oil, minerals, and exporting petroleum products. This initiative aims to stabilize supply chains and diversify procurement routes amid geopolitical crises, such as the blockade of the Strait of Hormuz.
K-Sure announced on August 27 that it signed a memorandum of understanding (MOU) with Trafigura in Geneva, Switzerland, on August 26 (local time) to facilitate financial support and mutual cooperation.
Trafigura is a global raw materials trading firm that deals in crude oil, petroleum products, gas, and minerals, establishing supply chains across various countries. The company supplies energy and minerals to domestic firms while also purchasing petroleum products produced in South Korea.
The agreement includes strategies to enhance key raw material transactions between Trafigura and domestic companies. K-Sure plans to back domestic firms' energy and mineral procurement and petroleum product export transactions through trade insurance and guarantees.
Notably, K-Sure aims to provide a financial safety net to ensure continued transactions between Trafigura and domestic companies despite geopolitical crises like the blockade of the Strait of Hormuz. This is expected to help diversify procurement lines concentrated in specific countries and regions, thereby reducing the risk of supply disruptions.
This is not the first instance of financial cooperation between K-Sure and Trafigura. Last July, K-Sure supported $200 million in medium- to long-term financing for charter fees paid by Trafigura to domestic shipping companies. This marked K-Sure's first case of providing medium- to long-term financing for shipping service exports, contingent on Trafigura increasing its use of domestic shipping firms.
Among the domestic shipping companies that signed charter contracts with Trafigura at that time, 55% were mid-sized firms. With this new agreement, the scope of support expands from shipping services to encompass energy and mineral imports and petroleum product export transactions.
Last year, Trafigura also signed a long-term contract with Korea Gas Corporation to supply U.S. liquefied natural gas (LNG) over the next decade. With the addition of this MOU, cooperation is expected to expand in securing domestic energy and crude oil supply sources by linking Trafigura's global supply chain with policy financing.
* This article has been translated by AI.
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