Will the Strait of Hormuz Be Blockaded?... Refining and Petrochemical Industries Face Unavoidable Impact [US Airstrike on Iran]

95% of Crude Oil Imports Come from the Middle East
International Oil Prices on the Rise Since Last Week
Industry: "Strengthening Monitoring Against Risks"
Seven Months of Oil Reserves Secured for Emergencies

As the United States carried out airstrikes against Iran, the geopolitical crisis in the Strait of Hormuz has intensified, making it inevitable that domestic oil refining and petrochemical industries will face deteriorating profitability due to a surge in oil prices and disruption of transportation routes.

According to industry sources on February 28, 69.1% of crude oil imported last year came from the Middle East, and 95% of that was brought into Korea via the Strait of Hormuz. Although Korea does not import Iranian crude oil, most crude from Saudi Arabia, Kuwait, and the United Arab Emirates is imported through the Middle East's Strait of Hormuz. Therefore, this airstrike is expected to significantly impact domestic oil prices.

With the instability in the Middle East, international oil prices have already begun to rise recently. As of February 27, Dubai crude oil, the Middle Eastern benchmark that serves as the domestic standard, closed at $71.25 per barrel, up $0.71 from the previous day. West Texas Intermediate (WTI) also rose by $1.81 from the previous day to $67.02 per barrel.

Oil prices also surged in June last year when tensions escalated in the Middle East. At that time, the Iranian parliament voted to blockade the Strait of Hormuz in response to U.S. airstrikes on Iranian nuclear facilities, which led to a sharp increase in oil prices.

However, as of the end of last year, Korea had secured a strategic petroleum reserve equivalent to about seven months (221 days), providing a buffer to cope with any immediate disruptions in crude oil supply.

The refining industry is strengthening its monitoring of international oil market fluctuations to minimize the impact on domestic consumers and the oil market in preparation for potential emergencies. For domestic petrochemical companies, which have already been suffering from a prolonged downturn, this situation is expected to be a double blow. As oil prices rise, prices of key raw materials such as naphtha also increase, and unstable conditions push up logistics costs, further increasing the burden on the petrochemical sector.

An industry official said, "If the Strait of Hormuz is blockaded, crude oil supply stability will be undermined worldwide, and there is a high possibility of supply disruptions," adding, "This could dampen oil demand and have a negative impact on business performance as well."

This content was produced with the assistance of AI translation services.