The government has decided to increase support from the ‘Supply Chain Stabilization Fund’ for companies that import crude oil from regions outside the Middle East. If companies handling ‘economic security items’ have suffered damage due to increased volatility in international oil prices, emergency operating loans will be increased. As an all-out war between the United States and Iran has destabilized the Middle East, the government is expanding diversification of crude oil import sources and support for affected firms.

On the 4th, Assistant Minister Kang Gi-Ryong of the Ministry of Finance and Economy held the ‘Joint Inspection Meeting of the Supply Chain Taskforce on the Middle East Situation’ and reviewed import trends, substitutability, and domestic production conditions for economic security items with high dependence on the Middle East, such as energy, chemical products, and materials and equipment, and discussed directions for response.

First, the government will use the Supply Chain Stabilization Fund, operated at a scale of 10 trillion won, to expand support for crude oil purchase funds and emergency operating funds. By activating the ‘Emergency Response Team for the Supply Chain Fund’ within the Export-Import Bank of Korea, when domestic refiners import crude oil from regions outside the Middle East such as North America and Central and South America, the ceiling on low-interest loan support will be raised from 90% to 100% of purchase funds. If companies handling economic security items suffer losses due to increased volatility in international oil prices, low-interest emergency operating loans will also be provided swiftly.

The Supply Chain Stabilization Fund was launched in 2024 to strengthen the supply chains of items important for economic security, such as rare earths, semiconductors and secondary batteries, and materials, parts, and equipment. The main support targets are companies seeking to localize items with high overseas dependence and large supply chain risks or to diversify import sources. Companies importing crude oil with a high dependence on the Middle East are also included among the beneficiaries.

They also discussed measures to stabilize crude oil supply and demand. They decided to prepare in advance the measures specified in the emergency manual, such as securing additional volumes from outside the Middle East, introducing overseas production volumes, and exercising priority purchase rights for joint stockpiles, and to release government stockpiles if needed.

The government maintains that, although tensions around the Strait of Hormuz are rising, there will be no problem with domestic energy supply and demand for the time being. It holds oil stockpiles equivalent to 208 days under International Energy Agency standards, so it has sufficient capacity to respond to short-term supply and demand crises.

It also assessed that, because materials, parts, and equipment items can secure alternative import sources or shift to domestic production, the impact of the Middle East situation on domestic supply and demand has so far been limited. However, in the case of naphtha (napsa), a feedstock for petrochemical products, 54% of imports come via the Strait of Hormuz, raising concerns about supply disruptions if the situation is prolonged. The government has decided to prepare support measures, such as redirecting export volumes for domestic use.

On the same day, Vice Prime Minister and Minister of Finance and Economy Koo Yoon-Cheol wrote on X, “The government has solid crisis response capabilities, including stockpiled oil and economic supply chains,” and added, “We will carefully prepare the necessary measures together with the relevant ministries.”