Lee, South Korea's Lee, says the country must balance risks as disruptions to oil supply from Hormuz threatens the country.
South Korea must accept some risk when importing crude oil from Middle East due to the blockade of the Strait of Hormuz. This was the message of President Lee Jae Myung on Monday.
In a cabinet discussion, Lee stated that there are few alternative routes and if the shipments were to be stopped altogether due to increased risk, this could have a severe impact on South Korea’s crude supply. It would also pose a significant risk to the general public. We?need a balance, and accept a degree of risk," Lee added.
Ahn Do-geol, a lawmaker from the ruling Democratic Party, said that South Korean authorities have been in contact with other oil producing countries, such as Saudi Arabia, Oman, and Algeria, to find alternative routes.
Ahn informed reporters that the Foreign Ministry was leading diplomatic efforts, including the possible dispatch of special envoys in support of the "process".
He said that the Industry Ministry has pushed a plan for five South Korean flagged vessels to travel the Red Sea route. Officials had also discussed the idea of supplying the government's oil reserves first to private refiners, and then swapping them once the replacement cargoes from overseas arrive.
The Ministry of Finance said that on Friday, Koo Yun Cheol met with envoys sent by member states of the Gulf Cooperation Council to ensure a constant supply for oil, liquefied gas, naphtha and urea.
South Korea, like many Asian economies, relies heavily upon energy imports. This includes through the Strait of Hormuz. The Strait of Hormuz was the conduit for 20 percent of the world's crude oil before Israel and the U.S. launched air strikes against Iran on 28 February. Iran has effectively closed down the waterway since then, driving up energy prices and fueling fears of a worldwide recession.
The Energy Ministry stated that the government aimed to supply 100 gigawatts by 2030 and increase the share of electricity generated from renewable sources?to over 20%.
It was announced that the border areas between Koreas will be designated as solar power deployment zones. Residents living near construction sites for high-voltage transmission lines can invest directly in these?projects to earn an income.
South Korea also has a target of a hydrogen reduction steelmaking facility, which uses hydrogen in place of coal or natural gas. A 300,000 ton pilot plant is expected to be finished by 2028 and full commercialisation will follow after 2037. (Reporting and editing by Ed Davies, Joyce Lee, and Kyu-seok Shim)
(source: Reuters)
