President Yoon Suk-yeol Signs Contracts During State Visit to Saudi Arabia, Aiming to Strengthen Energy Cooperation Between the Two Countries
Saudi Crude Oil Equivalent to About Twice South Korea's Daily Oil Imports, 5.3 Million Barrels Stored by K
Korea National Oil Corporation (President Kim Dong-seop) has signed an international joint stockpiling agreement with Saudi Arabia's national oil company Aramco to store 5.3 million barrels of crude oil at the Korea National Oil Corporation's Ulsan storage base.
President Kim Dong-seop of Korea National Oil Corporation (left) is taking a commemorative photo with Ahmed Al-Kunaini, Head of Marketing at Aramco.
This agreement was signed as part of strengthening energy cooperation between the two countries during President Yoon Suk-yeol's visit to Saudi Arabia.
By storing 5.3 million barrels of Saudi crude oil at the Ulsan storage base, Korea National Oil Corporation has secured storage volume that can be utilized in case of domestic energy crises such as crude oil supply instability. Considering the recent turmoil in the Middle East due to the Israel-Hamas armed conflict causing oil prices to fluctuate, proactively bringing in a large volume of Middle Eastern crude oil domestically is evaluated as a significant enhancement of the country's energy security response capabilities.
Korea National Oil Corporation expects to save approximately 550 billion KRW in crude oil purchase costs required to secure 5.3 million barrels through the international joint stockpiling project with Aramco.
Also, considering that Saudi Arabia is South Korea's top crude oil supplier, accounting for about 33% of the crude oil imported into the country (as of the end of 2022), this volume, equivalent to about twice the daily crude oil import volume of South Korea, is expected to greatly contribute to stabilizing domestic petroleum supply in the future.
Through this cooperation between Korea National Oil Corporation and Aramco, Aramco has established an additional crude oil supply base for its customers in the Asia region.
This year, Korea National Oil Corporation has additionally secured indirect stockpiling volumes through international joint stockpiling projects with key Middle Eastern oil-producing countries, and plans to continuously secure strategic reserves through strategic partnerships with major oil-producing countries going forward.
The Ministry of Trade, Industry and Energy stated regarding this international joint stockpiling cooperation with Saudi Arabia, "This contract is a successful business model beneficial to both companies, and the two countries, which have built a strategic friendly relationship in the energy sector, have created an important opportunity to further solidify cooperation in the energy field through this agreement."
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