[Insight & Opinion] Petrochemical Industry Directly Linked to National Security

Naphtha Supply, Vital for Chemical Products, Brings Welcome Relief

Calls to Abandon the Petrochemical Industry Must Be Resisted

Due to the ongoing war between Russia and Ukraine, 27,000 tons of Russian naphtha—designated as a sanctioned item by the United States—have entered South Korea. This is especially welcome news for the petrochemical industry, which has been suffering from the so-called "naphtha crisis" triggered by the blockade of the Strait of Hormuz, a consequence of the unresolved Middle East war that has lasted for over a month. It had become an urgent reality for us to devise alternatives to Middle Eastern naphtha, which previously accounted for 35% of domestic demand.

Fortunately, breathing room was provided as the United States temporarily eased sanctions on Russian petroleum products. Although the imported volume is less than Korea’s daily consumption, it is still a highly encouraging achievement resulting from the cooperation between the government and corporations. However, it must be noted that this does not mean Korea can now continue to import Russian crude oil and naphtha without restriction. As a country that understands the suffering of the Ukrainian people caused by Russia’s invasion, Korea cannot ignore the potential impact of importing Russian crude oil and naphtha on the Russia-Ukraine war.

Naphtha has become a household word in Korea due to the sudden outbreak of the Middle East war. Naphtha is an intermediate material produced at refineries along with gasoline, diesel, kerosene, and jet fuel, during crude oil refining. Using facilities similar to distillation units—called naphtha cracking centers (NCCs)—naphtha is broken down into ethylene, propylene, butylene and other compounds, which are then used as raw materials for chemical products such as vinyl, plastics, synthetic fibers, synthetic rubber, pharmaceuticals, cosmetics, and household chemical goods.

Naphtha is also known as "napsa" in Korean and, in English, "naphtha." The term originates from the Persian word "naft," meaning petroleum, a black, combustible liquid that seeps from the ground. It began to be called naphtha in ancient Greece and also meant "crude oil." The modern usage of the term started in the 19th century with the rise of the refining industry. Chemically, naphtha is a mixture of hydrocarbons with 5 to 12 carbon atoms. During the distillation process, it is classified as "light naphtha," obtained at 30 to 90 degrees Celsius, and "heavy naphtha," obtained at 90 to 200 degrees Celsius. When anti-knock agents such as MTBE are added to naphtha, it becomes gasoline.

The petrochemical industry, which produces chemical products by cracking naphtha, is a vital national infrastructure sector. In 2024, exports from the industry totaled $48 billion, making it the fourth largest after semiconductors, automobiles, and general machinery. The influence of the petrochemical industry on downstream sectors—such as semiconductors, automobiles, shipbuilding, textiles, and home appliances—cannot be overlooked. As seen during the shortage of government-issued trash bags, this is an essential industry closely tied to the daily lives of the public.

The petrochemical industry, which uses naphtha as a raw material, is also directly linked to national security. This was clearly experienced during the semiconductor material dispute with Japan in 2019 and the urea water solution crisis triggered by China’s export restrictions in 2021. The "autonomous restructuring" of the petrochemical industry, which has already been underway, must also be brought to completion. Of course, the pain of restructuring may be even harsher in times of crisis, but it is inevitable. We must firmly reject the "neoliberal" argument that calls for a complete abandonment of the petrochemical sector simply because it is a traditional "smokestack industry." We have already experienced the painful consequences of completely abandoning urea production in 2012—a mistake that must never be repeated. Korea cannot entrust its security to China, a country that disregards international trade rules. Like the United States and Japan, Korea must commit to producing at least the minimum volume needed for domestic demand with its own resources.

Deokhwan Lee, Professor Emeritus at Sogang University, Science Communication

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