Korea National Oil Corporation Attracts Kuwaiti Crude Amid Escalating Middle East Tensions

South Korea's Second Largest Crude Oil Import Type in 2023: 4 Million Barrels of Kuwaiti Crude Oil

All Top 3 Middle Eastern Oil Importing Countries Sign International Joint Stockpile Agreements

Korea National Oil Corporation (President Kim Dong-seop) announced on the 31st that it has signed an international joint stockpiling agreement with Kuwait Petroleum Corporation (KPC), the Kuwait state-owned oil company, to store 4 million barrels of crude oil at the Korea National Oil Corporation's Ulsan storage base.

President Kim Dong-seop of Korea National Oil Corporation and Chairman KPC Sh. Nawaf Saud Al-Sabah are taking a commemorative photo after signing the international joint stockpiling agreement.

The CEOs of the Korea National Oil Corporation and KPC held the signing ceremony for the international joint stockpiling agreement at KPC headquarters in Kuwait on the same day.

President Kim Dong-seop of Korea National Oil Corporation (4th from the left in the first row), Chairman KPC Sh. Nawaf Saud Al-Sabah (4th from the right), Ambassador Park Jong-seok to Kuwait (3rd from the left), and other attendees of the signing ceremony are posing for a commemorative photo after signing the joint reserve agreement.

The event was attended not only by the CEOs of both companies and key executives of KPC but also by Park Jong-seok, the Ambassador of Korea to Kuwait, and Sameeh Essa Johar Hayat, Deputy Minister of the Kuwait Ministry of Foreign Affairs, celebrating energy cooperation between the two countries.

This international joint stockpiling agreement with KPC is significant in that the Korea National Oil Corporation secured storage volume that can be utilized in the event of a domestic energy crisis such as crude oil supply instability by storing 4 million barrels of Kuwaiti crude oil at the Ulsan storage base. Amid rising tensions in the Middle East due to recent Israel-Iran issues, proactively attracting a large volume of Middle Eastern crude oil to the domestic market has further strengthened the country's energy security preparedness.

Considering that KEC (Kuwait Export Crude Oil), the main crude oil exported by Kuwait, ranks as the second-largest single crude type imported by Korea (8.1% of total crude imports in 2023), the volume of this agreement, equivalent to about 1.5 times Korea’s daily crude oil import volume, is expected to greatly contribute to stabilizing domestic oil supply in the future.

KPC, through cooperation with the Korea National Oil Corporation, has also established a stable crude oil supply base for customers in Asia, including Korea. This contract is evaluated as a win-win for both companies as it increases the utilization and value of Kuwait’s crude oil.

Notably, this year marks the 60th anniversary of Korea-Kuwait energy cooperation, and this agreement is expected to further strengthen energy collaboration between the two countries going forward.

The Korea National Oil Corporation has been continuously playing a pivotal role in enhancing national energy security by building strategic partnerships through international joint stockpiling projects with key Middle Eastern oil-producing countries. Following last year’s agreements with ADNOC of the UAE and Saudi Aramco of Saudi Arabia, this year’s contract with Kuwait’s KPC has brought a total of 13.3 million barrels of Middle Eastern crude oil into Korea.

For reference, these three countries rank first (Saudi Arabia, 32.6%), third (UAE, 10.9%), and fourth (Kuwait, 9.6%) in Korea’s crude oil imports as of 2023, and the combined volume imported from these three countries exceeds 50% of the total crude oil imports.

The Ministry of Trade, Industry and Energy stated regarding the international joint stockpiling cooperation with Kuwait, “Kuwait has been a partner cooperating with Korea since the early development of Korea’s oil industry. This contract reaffirms the strategic partnership and provides an opportunity to strengthen cooperation across the energy sector in the future.” Additionally, the ministry added, “Korea imports about 72% of its crude oil from the Middle East (as of 2023). By signing international joint stockpiling agreements with the top three Middle Eastern countries from which Korea imports crude oil, this will greatly contribute to domestic energy security.”

This content was produced with the assistance of AI translation services.