Country Brief: South Korea

Energy Profile

Metric	Value
Crude oil imports	~2.8M bbl/day
Domestic production	Negligible
Hormuz-dependent imports	~1.7-2.0M bbl/day (~70% of crude imports)
LNG imports	~46.7M tonnes/year (2025); ~15% from Qatar via Hormuz
Strategic reserves (KNOC government)	~100M barrels (9 stockpiling bases, 146M barrel capacity)
Total reserves (government + commercial)	~200-208 days of consumption (well above IEA 90-day minimum)
Refining capacity	~3.5M bbl/day (world’s 5th largest)
Key crude suppliers	Saudi Arabia, UAE, Kuwait, Iraq, Russia

Key Infrastructure

• SK Energy Ulsan Refinery: 840K bbl/day, world’s 3rd largest single-site refinery
• GS Caltex Yeosu Refinery: 800K bbl/day; world’s 4th largest (Chevron 50% JV)
• S-Oil Onsan Refinery (Ulsan): 669K bbl/day. Saudi Aramco holds 63.4% stake; Shaheen petrochemical complex (3.2M mt/year) commissioning 2026
• Hyundai Oilbank Daesan Refinery: 520-600K bbl/day, integrated refining-petrochemical complex
• SK Incheon Petrochem (Incheon Refinery): 275K bbl/day; serves Seoul metropolitan demand
• KNOC SPR Bases: 9 stockpiling facilities nationwide with 146M barrel total capacity
• KOGAS LNG Terminals: Incheon, Tongyeong, Samcheok (receiving and regasification infrastructure)

Key Actors

• MOTIE (Ministry of Trade, Industry and Energy): energy policy, emergency coordination, fuel price controls
• KNOC (Korea National Oil Corporation): operates SPR, upstream resource development
• SK Innovation / SK Energy: largest refiner; Ulsan and Incheon complexes
• GS Caltex: second-largest refiner; Chevron JV; Yeosu complex
• S-Oil: third-largest refiner; Saudi Aramco’s downstream anchor in Korea (63.4% stake)
• Hyundai Oilbank: fourth-largest refiner; Daesan complex; HD Hyundai subsidiary
• KOGAS (Korea Gas Corporation): state-owned; monopoly LNG importer and wholesaler; 6.1M mt/year Qatar contracts
• Samsung Electronics / SK Hynix: semiconductor fabrication dependent on stable power supply (indirect energy exposure)

Crisis Exposure (Day 94, Crisis Concluded May 5, Ceasefire Indefinite but Fragile)

• ~70% of crude imports transit Hormuz, ~1.7-2.0M bbl/day still routed through the chokepoint. This is the core exposure and it has not changed
• The military crisis concluded May 5 (Operation Epic Fury formally ended). The ceasefire has been indefinite since Apr 21 but it is fragile and repeatedly violated (US strikes Apr 19, May 7, May 25, plus late-May “defensive strikes” in southern Iran answered by Iranian ballistic missiles on Kuwait)
• Hormuz is open on paper but physically choked. Iran declared the strait open in mid-April, yet open transits have been near zero since ~May 6. Iran is reportedly charging tolls exceeding $1M per ship, mines are uncleared, and P&I and war-risk insurance are not restored. The US “dual blockade” (US blocks Iranian ports since Apr 13, Iran chokes the Gulf) persists
• ~600 tankers are stranded inside the Gulf and ~240 waiting outside as of mid-May. For Korea this means the AG-Korea crude pipeline is still effectively interrupted 13 weeks in, regardless of the diplomatic headlines
• The MoU endgame matters most to Korea now. A tentative 60-day US-Iran framework was reached May 28 but remains UNSIGNED by both sides (Trump added demands May 29-30). It would reopen Hormuz with no tolls and require Iran to clear mines within 30 days, in exchange for lifting the US blockade and some sanctions waivers. Physical supply restoration to Ulsan and Yeosu lags any signature by weeks, not days
• Frozen Iranian funds are a Korea-specific wildcard in the deal. ~$6B in Iranian won-denominated proceeds that accumulated in Korean banks (Woori, IBK) were transferred to Iran’s account at Qatar National Bank in 2023 and re-frozen after the Gaza war; they were not held in Seoul during this crisis. That legacy Korea-Iran balance now figures in the broader asset-unfreezing discussion inside the MoU. If unlocked, it resolves a years-old bilateral irritant, and Seoul’s cooperation on the underlying won-settlement mechanism remains relevant to any reopening of Korea-Iran trade
• Markets have round-tripped and then some. KOSPI collapsed ~19% to a March 4 bottom (~5,094), the worst single session in its 43-year history, then rebounded hard. By late May it set record highs near 8,100 and traded ~8,000 on ceasefire-extension and reopening hopes. The fear trade has fully unwound even though the strait has not physically reopened
• Oil cost pressure has eased sharply. Brent is ~$91, down from the WTI war peak of ~$115 on Apr 7, and fell ~19% across May (its worst month since 2020). The import-bill relief is real, but it reflects demand and risk repricing, not restored Gulf flows. Route security, not price, is the residual risk
• Reserve coverage was the binding constraint at the peak: during the blockade Korea’s usable cover compressed toward ~26 days of consumption against the IEA 90-day standard, which is what drove the March emergency measures (first fuel price cap in 29 years on Mar 9, SPR-release and product-export-ban deliberations, the president’s Mar 27 electricity-conservation call). With Brent off and partial flows expected post-MoU, that pressure has receded but the thin physical buffer is the lesson Seoul takes away
• Refining sector ran at reduced utilization through the disruption as Gulf crude deliveries stalled. SK Ulsan and S-Oil Onsan are most exposed given Middle Eastern crude optimization. Expect a throughput rebound to track actual transits, not the paper reopening
• S-Oil’s Aramco supply chain stayed under direct stress; 63.4% Saudi ownership means Korea’s third-largest refiner’s supply and equity interests are intertwined with the same Gulf flows the crisis interrupted
• LNG buffer held: ~15-30% Qatar exposure was managed with Australian and Southeast Asian diversification; KOGAS reported no shortages
• Samsung Electronics evacuated staff from Iran and Israel during the war; fabs were never directly hit, but the power-stability and input-cost exposure is the channel analysts watch

Structural Vulnerabilities

• Near-total crude import dependency with ~70% Hormuz exposure; no domestic production buffer. The crisis showed usable cover can compress toward ~26 days under a sustained blockade despite a headline ~200-day combined reserve
• Refining overcapacity relative to domestic demand makes Korea a major product exporter. An export ban would disrupt regional fuel markets (Japan, Southeast Asia)
• S-Oil’s Aramco ownership creates supply chain concentration risk: single-source equity dependency on Saudi crude
• Semiconductor-energy nexus: Samsung and SK Hynix fabs require uninterrupted power; prolonged energy crisis threatens chip production timelines with global supply chain implications
• Won depreciation under oil shock pressure; BOK intervention capacity tested simultaneously with market stabilization demands
• Shipbuilding sector (HD Hyundai, Samsung Heavy) exposed to order cancellations if global trade contracts
• Petrochemical overcapacity: naphtha crackers (SK, LG Chem, Lotte Chemical) face feedstock cost surge and margin compression

TankerBrief Coverage Angle

Korean refining desks, commodity traders (Singapore/Seoul), semiconductor supply chain analysts, and shipping companies on the AG-Korea route. On Day 94 the question has shifted from “will the strait reopen” to “when do physical transits actually resume, and on what terms.” They need: MoU signature tracking (the unsigned 60-day framework, no tolls and mine-clearance within 30 days, is the gating event for AG-Korea flows), real-transit-vs-paper-reopening monitoring (transits near zero since ~May 6 despite the strait being “open”), the status of the ~$6B in once-Korea-held Iranian won funds (moved to Qatar in 2023, since re-frozen) now folded into the asset-unfreezing talks, mine-clearance and P&I/war-risk-insurance restoration timelines, KNOC SPR refill planning after the drawdown, refinery utilization data (especially SK Ulsan and S-Oil Onsan throughput as deliveries normalize), and Aramco-S-Oil supply chain status. With Brent back to ~$91 and KOSPI at record highs near 8,000, the price and equity panic has unwound, so the live risk is route security and supply timing rather than cost. South Korea’s outsized refining sector (the 5th largest globally) means its procurement shifts and product export decisions ripple across Asian fuel markets, and the semiconductor power-stability angle keeps a tail risk on global tech equities. The takeaway from the crisis: a headline ~200-day reserve can still leave usable cover near ~26 days under a real blockade.