The aftermath of the Middle East war has caused a major change in South Korea's energy import structure.

The long-term escalation of the Middle East war and the impact of the Strait of Hormuz blockade have led to a reduction in last month’s imports of crude oil, naphtha, and helium into South Korea, and the procurement structure for energy and raw materials—where South Korea is highly dependent on the Middle East—is also being rapidly restructured.

According to data from K-stat, the Korea International Trade Association’s statistics service, shown on the 26th, last month South Korea’s crude oil import value was $5.95 billion, down 5.3% from a year earlier. In particular, the share of Middle East–produced crude oil in South Korea’s crude oil imports fell from 73% in the same month last year to 63% this year, a decline of 10 percentage points. By country, the largest importer was Saudi Arabia at $1.98 billion, down 13.4%; the UAE at $890 million, down 7.7%; Iraq at $490 million, down 19.0%; and Kuwait at $250 million, down 46.4%. The Strait of Hormuz is the key maritime passage through which crude oil from Gulf oil-producing countries is shipped to global markets; if this route is blocked, countries like South Korea—where dependence on Middle East production is high—are more likely to face direct disruptions.

The reduced volume of Middle East production is mainly being offset by U.S. supply. Last month, South Korea imported $1.7804 billion worth of U.S. crude oil, up 75.8% year on year, reaching the highest level in 1 year and 8 months. U.S. crude oil is relatively light, which has the advantage of being easy to blend with the Middle East heavy crude oil that South Korean domestic refineries import in large quantities. This is against the backdrop of the refining industry increasing short-term spot trading in order to expand imports from the United States. In addition, the U.S. government’s requirement for South Korea to expand energy imports has also had an impact. In an interview with Yonhap News Agency, Jin Seong-gwan, Minister of Trade, Industry, and Energy of South Korea, said that in the process of reducing reliance on Middle East production, increasing the share from the United States is unavoidable; it has nothing to do with investments in the U.S., and is an important option in terms of diversifying supply chains. The government said that even if the Middle East war calms down, efforts to continue importing and transporting crude oil from non–Middle East production sources will be pushed forward. In fact, South Korea’s crude oil imports from Australia were $150 million, up 44.7%; from Malaysia were $90 million, up 140.5%.

The situation for naphtha, a basic feedstock for the petrochemical industry, is similar. Last month, South Korea’s naphtha import value was $1.99 billion, down 23.8% year on year. Naphtha from Qatar accounted for $180 million, down 7.5%; from the UAE for $170 million, down 57.5%; and from Kuwait for $100 million, down 48.1%. Naphtha is a starting raw material for plastics, synthetic fibers, and various chemical products, so if supplies are disrupted, it will affect the production costs and operating rates of the entire petrochemical industry. However, substitution of import sources is also underway. Naphtha from Oman, which is located outside the Strait of Hormuz and is relatively less affected by this disruption, increased to $170 million, up 28.5%; imports from Greece rose to $130 million, up 193.5%; and imports from the United States surged to $60 million, up 5652.8%. This can be interpreted as companies shifting their procurement actions toward prioritizing the feasibility of obtaining supply rather than focusing solely on unit prices when the supply structure concentrated in a particular region becomes unstable.

Helium, which is used as a coolant in semiconductor and display manufacturing processes, is also becoming a burden. Last month, South Korea imported $12.98 million worth of helium, down 23.5% from a year earlier; the largest importing country, Qatar, supplied $6.54 million, down 30.1%. Recently, production disruption concerns have been intensifying after Qatar stopped operating its largest helium industrial park due to an Iranian drone attack. The problem is that there are not many helium-producing countries themselves. South Korea’s helium imports rely on Qatar for 64%, so the longer the Middle East crisis lasts, the more difficult it becomes to find alternative import sources compared with crude oil or naphtha. The Ministry of Trade, Industry, and Energy said that alternative quantities are currently being secured from the United States and other places, and there are no issues in domestic supply and demand; however, private sources say that structural vulnerabilities still exist. A senior research committee member at the Korea International Trade Association said that this disruption is a structural supply shock resulting from the combination of concentrated production locations and maritime bottlenecks. In the short term, South Korea needs to shift to a procurement system centered on securing actual quantities, and in the long term, it must change the industrial structure so that production can be maintained even under high oil prices and supply chain disruptions.

The government said it will, centered on a supply chain support center jointly established by relevant agencies, inspect on-site conditions and take measures to ensure that petrochemical raw materials required for healthcare, medical care, and core industries do not fail to be supplied properly. However, this situation once again demonstrates South Korea’s serious dependence on specific regions and specific shipping routes. In the future, this trend is very likely not to be limited to crude oil; it may also trigger a broader restructuring of the entire supply chain covering petrochemical raw materials and industrial gases. Policy directions and corporate strategies may move not only toward expanding import sources, but also toward adjusting reserves, logistics, and long-term contracts at the same time.