Government Eases Mandatory Crude Oil Stockpiling from 40 to 20 Days... Implements IEA Cooperation with '12 Million Barrels'

"Easing Mandatory Private Stockpiling to Expand Scope for Autonomous Inventory Management"

Yang Kiwook, Director of the Industrial Resource Security Office at the Ministry of Trade, Industry and Energy, is conducting a daily briefing of the Middle East War Response Headquarters at the Government Complex Sejong on the 28th. Ministry of Trade, Industry and Energy.

The government has decided to halve the number of mandatory crude oil stockpiling days required of private refiners, in order to implement the joint resolution of the International Energy Agency (IEA). However, it made clear that government-held reserves will not be released into the market immediately but will be kept as a "last resort," maintaining a cautious approach in preparation for a prolonged Middle East war.

Yang Kiwook, Director of the Industrial Resources Security Office at the Ministry of Trade, Industry and Energy, said at a daily briefing of the Middle East War Response Headquarters held at the Government Complex Sejong on the 28th, "In order to responsibly implement the IEA joint resolution, we plan to enact and enforce a notice on the 29th to reduce the number of mandatory private stockpiling days from the current 40 days to 20 days."

Accordingly, the government plans to notify the IEA that this will have the effect of releasing about 12 million barrels of stockpiled oil. Under the Petroleum Business Act, refiners are required to stockpile crude oil and petroleum products equivalent to 40 days of average domestic sales, but this will be lowered to 20 days, allowing the private sector to manage inventories more autonomously.

The government stressed that this measure does not mean an immediate release of actual supplies. With private crude oil inventories currently at a sufficient level of around 90 million barrels, and considering the possibility of worsening conditions in the Middle East after August, the government determined there is little need to inject government reserves into the market right away.

Director Yang explained, "We are easing mandatory private stockpiling requirements to expand the scope for autonomous inventory management," adding, "This does not mean that 12 million barrels will be released immediately." He continued, "It is necessary to keep government-held reserves as a means to respond to the worst-case scenario."

The government has been seriously considering adjusting mandatory private stockpiling requirements, rather than directly releasing government-held reserves, as its main method of participating in the IEA joint release. At a previous briefing on the 26th, Director Yang also said, "We do not currently see a strong need to release government-held reserves," and noted, "We are examining other implementation methods, such as adjusting the number of mandatory private stockpiling days."

Director Yang explained that this measure was decided in consultation with private refiners. The refining industry also conveyed the view that, while maintaining the ongoing stockpiled oil swap system, it is preferable to reserve the release of government-held reserves for more severe supply and demand crises.

The government plans to participate in the IEA joint resolution in support of international oil price stability and global cooperation, but will pursue a phased and selective response that also takes into account both domestic crude oil supply stability and the possibility of prolonged Middle East risks.

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