Seoul To Restore Pre-War Naphtha Supply In May

In May, South Korea is expected to restore up to 90% of its previous naphtha import volumes that existed before disruptions linked to tensions involving Iran, AzerNEWS reports.

According to reports, the country's petrochemical industry is gradually increasing production capacity as supply conditions stabilize and raw material availability improves.

This recovery has been supported by government efforts to diversify import sources and reduce costs for businesses. Earlier, the government announced a support package of 674.4 billion won (approximately $457 million) to partially offset rising naphtha prices between April and June.

In addition, South Korea has secured contracts for 2.1 million tons of naphtha from Middle Eastern suppliers, including Oman and Saudi Arabia. This volume is roughly equivalent to one month of national consumption, helping to strengthen short-term energy security.

At the same time, the oil swap mechanism continues to operate actively. Refining companies have requested around 31 million barrels for April–May. Of this, deals for 14 million barrels have already been finalized, while negotiations for an additional 16.5 million barrels are expected to conclude in May.

Under this system, the state temporarily supplies oil from strategic reserves to companies, which later repay it through alternative imports. This flexible mechanism allows the industry to maintain stability even during periods of geopolitical uncertainty.

Authorities have also indicated that the program could be extended if tensions in the Middle East persist. Initially, the mechanism was planned only until the end of May.

South Korea's approach combines both financial subsidies and physical resource swaps, which makes it one of the more adaptive industrial supply strategies in Asia. Analysts note that this hybrid model helps reduce exposure to sudden global oil price shocks while keeping petrochemical production highly competitive.

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