As Instability in the Oil Market Grows Due to the 'Ukraine Invasion'... Korea National Oil Corporation Strengthens Response

Consideration of Strategic Oil Release and Import of Overseas Crude Oil Production

On the 1st (local time), soldiers are riding armored vehicles on empty roads in Kyiv, the capital of Ukraine, as air raid sirens sound. (Image source=AP Yonhap News)

[Asia Economy Reporter Moon Chaeseok] Korea National Oil Corporation (KNOC) announced on the 2nd that it is operating an "Oil Crisis Response Task Force (TF)" to prepare for the oil crisis situation caused by Russia's invasion of Ukraine.

Since the invasion of Ukraine by Russia began on the 24th of last month, KNOC has activated a TF composed of five teams: Market Monitoring Team, Strategic Stockpile Team, Overseas Crude Oil Import Team, among others. On the afternoon of the same day, KNOC President Kim Dong-seop chaired a TF meeting at the Ulsan headquarters, reviewing response plans and readiness for scenarios such as the release of the corporation's strategic oil reserves and the import of overseas crude oil to ensure stable domestic oil supply in emergencies. President Kim stated, "With the international community's economic sanctions against Russia intensifying and the resulting increased instability in the crude oil market, the prices of West Texas Intermediate (WTI) and Brent crude oil have reached the $100 level for the first time in eight years." He added, "The corporation will strengthen monitoring of domestic and international oil markets and carry out market stabilization measures such as the release of reserves without fail in case of emergencies to firmly protect national energy security."

As of 1:19 PM Korea time on the same day, Brent crude futures rose $5.30 (5.0%) to $110.23 per barrel. At the same time, WTI futures also increased by $5.02 (4.1%) to $108.41, approaching the $110 mark. Member countries of the International Energy Agency (IEA), including the United States, agreed to release 60 million barrels of emergency reserves to stabilize oil prices. The U.S. will release 30 million barrels, and the remaining member countries will share the release of the other 30 million barrels. The Korean government also expressed its intention to actively participate in the release of reserves. Once the timing and volume of the reserve release are finalized through discussions among IEA member countries, related procedures will proceed accordingly. Currently, Korea's oil reserves stand at 97 million barrels, enough to be used for up to 106 days without imports, providing more than ten days of reserve surplus beyond the recommended level.

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