Korea to Prioritize Purchase of 4 Million Barrels from UAE During Supply Crisis

Signing of 7 MOUs Including Comprehensive Energy Partnership Between Both Countries

[Asia Economy Sejong=Reporter Dongwoo Lee] In the event of an emergency in domestic crude oil supply and demand, South Korea has agreed to prioritize the purchase of 4 million barrels from the United Arab Emirates (UAE). The two countries also plan to jointly develop third-country nuclear power markets and expand nuclear cooperation, including the development of Small Modular Reactors (SMRs).

The Ministry of Trade, Industry and Energy announced on the 15th that during President Yoon Seok-yeol's visit to the UAE, a total of seven joint statements, memorandums of understanding (MOUs), or contracts were signed with the UAE side, including these matters.

Korea National Oil Corporation signed an international joint stockpiling project contract with Abu Dhabi National Oil Company (ADNOC) to prioritize the purchase of the entire contracted volume of 4 million barrels in case of an emergency in domestic crude oil supply and demand, storing it at the Yeosu stockpile base. The Ministry explained that this strengthens energy security and secures rental income amounting to 14.4 million USD over three years.

Minister Lee Chang-yang of the Ministry of Trade, Industry and Energy signed the "Korea-UAE Strategic Industry and Advanced Technology Partnership MOU" with Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, laying the foundation for companies from both countries to create growth engines in new industries and advanced technology sectors. Specifically, they agreed to promote the "Advanced Manufacturing Initiative," which includes digital transformation, mobility, aerospace, parts and materials, and supply chain cooperation.

The Ministry particularly expects that the resilience of manufacturing-related supply chains, such as pharmaceuticals and medical devices, will be strengthened. The industrial cooperation fields between the two countries are expected to expand beyond advanced manufacturing equipment and materials to advanced convergence new industries such as smart farms and e-learning, accelerating the entry of Korean companies into the UAE market.

[Image source=Yonhap News]

Minister Lee also signed the "Trade and Investment Promotion Framework (TIPF) MOU" with Abdullah Al Mari, UAE Minister of Economy. TIPF is a comprehensive trade cooperation platform that allows both countries to jointly respond to changes in the international trade order and pursue country-specific customized trade cooperation strategies. The TIPF, the first signed with the UAE, includes areas such as trade facilitation, investment promotion, supply chains, digital, green, bioeconomy, industrial development strategies, logistics cooperation, business environment, and trade technical barriers.

With Minister Al Jaber, they agreed to establish a cooperation platform covering the entire energy sector through the "Korea-UAE Comprehensive and Strategic Energy Partnership Joint Declaration (CSEP)." In the nuclear power sector, Korea Electric Power Corporation (KEPCO), Korea Hydro & Nuclear Power (KHNP), and Emirates Nuclear Energy Corporation (ENEC) signed the "Net Zero Acceleration MOU" to expand the Barakah nuclear power plant, jointly develop third-country nuclear power markets, and develop Small Modular Reactors (SMRs, with a generation capacity of 300,000 kW), which is expected to broaden the base of nuclear cooperation.

In the hydrogen sector, a "Hydrogen Cooperation MOU" was established to create an overall hydrogen cooperation framework. SK Inc. and Mubadala Investment Company signed a "Voluntary Carbon Market (VCM) Partnership MOU" to cooperate in building a private-led carbon market centered on the Asian region. Furthermore, by signing the "Trade and Investment Promotion Framework (TIPP)"?a comprehensive trade cooperation platform responding to changes in the international trade order?with the UAE for the first time, it is expected to contribute to expanding trade and revitalizing investment.

The Ministry stated, "We expect that Korean companies will lay the foundation for securing a leading position in the Asian voluntary carbon market by discovering various carbon reduction projects and establishing carbon standards in the future."