Will 'K-friendship' Become a New Model for International Cooperation? Korea National Oil Corporation and Kuwait Jointly Stockpile Crude Oil

2 Million Barrels of Kuwaiti Crude Arrive on April 22
13.3 Million Barrels of High-Demand Middle Eastern Oil Jointly Stockpiled to Strengthen Energy Security

Korea National Oil Corporation (President Kim Dongseop) has announced the arrival of 2 million barrels of Kuwaiti crude oil in Korea, in accordance with the international joint stockpiling agreement signed last year with Kuwait Petroleum Corporation (KPC).

The Kuwait International Joint Stockpile carrier (AL-SIDDEEQ) loaded with 2 million barrels of crude oil arrived at Ulsan Port. Provided by Korea National Oil Corporation.

This shipment was made under the international joint stockpiling agreement for 4 million barrels, signed between Korea National Oil Corporation and KPC in Kuwait on October 31, 2024.

On April 22, Korea National Oil Corporation reported that a tanker carrying 2 million barrels of Kuwait Export Crude Oil (KEC) had arrived at Ulsan Port, and that preparations are underway to unload the 2 million barrels of KEC at the Ulsan stockpile base.

The international joint stockpiling project involves leasing idle storage facilities owned by Korea National Oil Corporation to foreign state-run oil companies, allowing them to store crude oil and other products.

During normal times, Korea National Oil Corporation earns foreign currency income by leasing storage facilities. In times of national crisis, it secures the right of first purchase for the stored crude oil, thereby enhancing its ability to respond to supply chain crises. By sharing crude oil stockpiling costs with oil-producing countries, the efficiency of public finances can also be improved.

The storage facilities of Korea National Oil Corporation are directly connected by pipelines to major domestic crude oil consumers such as refineries, ensuring high supply and demand efficiency. Due to Korea’s geographical location, these facilities are also recognized as key logistics hubs for the region, including China and Japan. Contract partners can improve their access and market share in the Asian market, with Korea as a central base, and can also secure logistics efficiency for their customers. This is why the international joint stockpiling project is a win-win for both Korea and its partners.

In particular, with this latest arrival, Korea has successfully attracted a total of 13.3 million barrels of crude oil from three major Middle Eastern countries?Saudi Arabia, the United Arab Emirates (UAE), and Kuwait?under international joint stockpiling arrangements. Considering that Korea’s daily crude oil imports stood at approximately 2.8 million barrels in 2023, the Middle Eastern international joint stockpile alone could cover about 4.8 days of supply.

Ultimately, signing international joint stockpiling agreements with Middle Eastern oil-producing countries is a significant policy achievement for Korea, which is highly dependent on Middle Eastern crude oil, as it diversifies supply risks and secures a stable supply base. As of last year, the combined volume of crude oil imported from these three Middle Eastern countries accounted for more than 50% of Korea’s total crude oil imports.

Among these countries, Kuwait holds special significance as it was the first country from which Korea imported crude oil in 1964. To celebrate the 60th anniversary of energy cooperation between Korea and Kuwait, the implementation of the international joint stockpiling agreement, and the first arrival of crude oil under this agreement, Korea National Oil Corporation held a commemorative event in Seoul on April 21. The event was attended by President Kim Dongseop, Sheikh Nawaf Saud Al Sabah, CEO of KPC, and key executives from both companies.

Both sides agreed that this agreement would serve as a turning point, strengthening the energy partnership between the two countries beyond a simple storage contract.

Officials are taking a commemorative photo at the Kuwait International Joint Stockpile Crude Oil Arrival Ceremony. (First row, third from the right: Kim Dongseop, President of Korea National Oil Corporation; first row, third from the left: Sheikh Nawaf Saud Al Sabah, CEO of KPC) Photo by Korea National Oil Corporation

President Kim Dongseop stated, "Through this cooperation, I hope that the relationship between Korea and Kuwait, as well as between Korea National Oil Corporation (KNOC) and KPC, will become even stronger, based on 'K-friendship.' We will continue to enhance trust and mutual benefit between the two countries through various forms of cooperation with Kuwait, and we will further expand the international joint stockpiling project to strengthen Korea’s energy security."