Seoul: South Korea will ease crude oil stockpiling requirements for the private sector in a step to carry out its oil release pledge under a joint plan adopted by International Energy Agency (IEA) members, an industry ministry official said Thursday. Starting Friday, private oil refiners will be required to maintain oil reserves equivalent to a volume of 20 days of average domestic sales until further notice, said Yang Ghi-wuk, deputy minister for trade, industry and resources security. Currently, the mandatory stockpiling requirement for oil refiners is 40 days.

According to Yonhap News Agency, Yang stated that the government made this decision to ensure the implementation of Seoul's pledge to release 22.46 million barrels of oil from its strategic reserves by June 9. This pledge is part of a joint plan adopted by 32 IEA member nations to address disruptions in oil markets resulting from the U.S.-Israeli war against Iran. The IEA recognizes this easing of private oil stockpiling requirements as a strategic move, allowing private oil refining companies to release supplies into the market voluntarily.

With this initiative, the Seoul government plans to report an oil release amounting to around 12 million barrels to the IEA. Regarding the release of oil reserves from state stockpiles, Yang mentioned that the government will determine the timing later, using it as a final card to respond to a potential oil crisis if the Middle East standoff prolongs beyond expectations.

Yang further explained that there is no immediate need for the government's oil release, as approximately 15 million barrels of oil have already been distributed in the market through the swap system. The government has been operating a crude oil swap system with private firms since last month to stabilize the domestic fuel market. This involves lending some of the crude stockpiles, mostly Middle Eastern crude, to oil refineries, which later restore the stock with alternative supplies secured by the companies.

South Korea has secured about 85 percent of pre-Iran war oil supplies for use throughout July and anticipates no major disruptions in crude supplies in August, Yang concluded.