Government Reviews Extending Strategic Oil Swap Through July

The government has decided to extend the strategic oil swap system it is currently operating through June, in preparation for a prolonged Middle East war. A further extension into July is also under review.
Yang Gi-uk, Director-General for Industrial and Resource Security, said at a briefing by the Middle East Situation Response Headquarters at Government Complex Sejong on the 30th, "It has become meaningless to even predict when the war will end," and added, "Companies also believe that the possibility of a prolonged conflict cannot be ruled out."
The strategic oil swap is operated by exchanging government-held reserve oil for crude oil that companies plan to import.
The government is also formally reviewing whether to continue its supplementary budget measures and import diversification policy beyond June. On the outlook for oil prices, it remained cautious, saying that "both West Texas Intermediate crude oil (WTI) and Brent Crude Oil prices are rising, so high levels are likely to persist for now."
No decision has yet been made on whether to release the strategic petroleum reserve (SPR), or on the timing and method of any release. Yang explained, "Alternative cargoes are scheduled to arrive in large volumes in May, and refiners have not officially raised any shortage concerns, so we will monitor demand a little longer."
The Red Sea route, an alternative shipping lane, is currently operating smoothly. A crude oil shipment for GS Caltex is expected to arrive in South Korea in early May after about 20 days at sea, and cargoes bound for Yangon via Korean-flagged vessels are also continuing to be deployed.
Meanwhile, the United States, which ranked only seventh among Naphtha import sources in 2025 before the war, has become South Korea's largest Naphtha supplier since the outbreak of the conflict. In just one year, it jumped from seventh to first place.
The government cited easier supply access and subsidy support as the reasons U.S. Naphtha became easier to secure. It said the naphtha differential support program helped improve price competitiveness, while supply from the U.S. was relatively stable from a supply chain perspective.
[email protected] Park Ji-young Reporter