Crude oil resource security alert raised to ‘Caution’ level

[Financial News]
The Ministry of Trade, Industry and Resources (MOTIR) announced that as of 3 p.m. on the 18th, it has decided to raise the resource security alert for crude oil from the previous "Attention" level to "Caution." For natural gas, recent increases in international prices are a concern, but considering supply and demand conditions such as storage levels and declining gas demand, the current "Attention" level will be maintained for now.
The resource security alert system has four levels: Attention, Caution, Warning, and Critical. Under Article 23 of the Special Act on National Resources Security, alerts are issued after comprehensively assessing the severity of the crisis and its potential impact on people’s livelihoods and the national economy.
The review found that the criteria for issuing a "Caution"-level alert had been met. Key factors included growing instability in major oil-producing countries in the Middle East, such as partial production disruptions and export restrictions caused by damage to production and transport facilities; widening instability in oil transport routes due to the closure of the Strait of Hormuz; and a roughly 40% rise in oil prices since the situation began.
For gas, international prices have surged following Qatar’s declaration of force majeure, raising concerns such as higher power generation costs. However, storage inventories are above the legally mandated minimum. Even if imports of Qatari gas were to be completely halted, alternative supplies sufficient to last through the end of the year have already been secured, and non-Middle Eastern volumes are being imported without major disruption. On this basis, authorities judged that it is appropriate to maintain the current "Attention"-level alert for the time being. At the same time, the government plans to closely monitor supply and demand conditions in cooperation with large gas consumers such as power generators and with the Ministry of Climate, Energy and Environment, and to take necessary measures in a timely manner.
In line with the upgrade of the crude oil alert to "Caution," the government will expand and strengthen measures to boost supply and manage demand. It will actively pursue the exercise of priority purchase rights for international joint stockpiles, secure alternative volumes that do not transit the Strait of Hormuz, and increase imports of overseas production. In particular, through international coordination with the International Energy Agency (IEA), Korea is drawing up a detailed plan to release 22.46 million barrels of strategic oil allocated to the country, tailored to domestic conditions, and will continue consultations with the Secretariat of the International Energy Agency on the timing and volume of the release.
Demand management will also be stepped up. As the situation in the Middle East is likely to persist, making a quick improvement in supply and demand conditions difficult, broad public participation in overcoming the crisis is urgently needed. In cooperation with the Ministry of Climate, Energy and Environment and other relevant agencies, the government plans to implement mandatory energy-saving measures in the public sector, promote voluntary campaigns in the private sector, and, if necessary, introduce compulsory demand-reduction measures, while detailing oil-saving plans suited to evolving conditions.
Minister of Trade, Industry and Energy Kim Jeong-gwan stated, "The government will respond swiftly to changes in the situation and work to achieve both stable crude oil supplies and protection of people’s livelihoods," adding, "We ask the public to stay attentive to the current situation and join us in overcoming this crisis."

aber@fnnews.com Park Ji-young Reporter