Seoul: The United States has become the largest exporter of naphtha to South Korea following the outbreak of the Iran conflict, the industry ministry said Thursday. South Korea currently imports 24.7 percent of its naphtha from the U.S., with imports from India, Algeria, the United Arab Emirates (UAE), and Greece following at 23.2 percent, 14.5 percent, 10.2 percent, and 4.5 percent, respectively.

According to Yonhap News Agency, before the war between the U.S. and Iran broke out in late February, the U.S. ranked seventh in terms of South Korea's naphtha imports, with the UAE in the top spot, followed by Algeria, Qatar, Kuwait, and India. Yang Ghi-wuk, deputy minister for trade, industry, and resource security, noted that the U.S. emerged as the largest import source due to the ease of securing supplies.

When questioned about a potential fundamental shift in Korea's naphtha supply chain, Yang expressed a cautious stance. He indicated it is too early to determine a structural change as the naphtha market is highly sensitive to prices. Yang mentioned that domestic supplies of naphtha, an essential industrial feedstock, are likely to stabilize next month due to efforts for import diversification and policy support measures.

South Korea anticipates securing up to 90 percent of its pre-Iran war naphtha supplies for May. Major petrochemical companies in South Korea are expanding their plant operations in response to increasing inbound supplies, according to the ministry. Yang highlighted that the volume of naphtha contracts signed over the entire month of March was matched within just half a month in April. Additionally, Seoul has been importing a significant amount of basic petrochemical feedstock from China.