The BGA Korea team, led by Managing Director B.J. Kim, wrote an update to clients on Korea’s energy security.

Context 

  • Korea is accelerating efforts to reduce its long-standing dependence on Middle Eastern energy supplies following renewed instability in the region. Around 70 percent of Korea’s crude oil imports have traditionally come from the Middle East, with most shipments transiting the Strait of Hormuz. Geopolitical uncertainty has reinforced energy security as a strategic priority, prompting both the government and local refiners to diversify crude import sources and strengthen supply chain resilience.
  • Since the outbreak of the Middle East crisis, the government has focused on expanding crude procurement from the United States, South America and Africa while developing alternative shipping routes. The share of Middle Eastern crude in Korea’s imports declined from 69.1 percent in 2024 to 62.8 percent from January-May 2026, while imports from the Americas rose to 26.6 percent as of May. The government aims to reduce this share to below 50 percent over the longer term.

Significance 

  • The government is actively pursuing new suppliers in South America as part of its diversification strategy. Korea will begin commercial imports of Argentine crude oil in 2027 following a pilot program this year. The agreement came during President Lee Jae Myung’s summit with Argentine President Javier Milei in Buenos Aires. Although Argentine crude imports remain small relative to Korea’s annual crude imports, officials view the country as an important long-term supplier.
  • The government is pursuing a similar strategy for liquefied natural gas (LNG). Under the recently announced 16th Long-Term Natural Gas Supply Plan (2026-2038), Korea intends to reduce dependence on Middle Eastern LNG, particularly from Qatar, while expanding imports from the United States and Australia. The government expects industrial demand, particularly from semiconductor manufacturing and artificial intelligence data centers, to remain resilient even though overall LNG demand is projected to decline as nuclear and renewable generation expands.

Implications 

  • Companies can expect continued energy diversification efforts even after tensions subside, reflecting a long-term structural shift rather than a temporary response to the current crisis. Korea’s four major refiners are reportedly expanding purchases of U.S. crude, with higher U.S. energy imports expected to support broader trade negotiations with Washington. Other refiners, including HD Hyundai Oilbank and SK Energy, are reportedly evaluating Venezuelan crude as an additional supply option.
  • Beyond immediate procurement efforts, the government is preparing broader shifts aimed at strengthening long-term energy security. Proposed measures include establishing a dedicated Industrial Resource Security Fund, expanding strategic petroleum reserves by around 20 million barrels from the current 146 million barrels, supporting refinery investments needed to process lighter crude grades and promoting imports from suppliers such as the United States and Africa. The Ministry of Trade, Industry and Resources is consulting with the Ministry of Planning and Budget and industry stakeholders on funding mechanisms.

We will continue to keep you updated on developments in Korea as they occur. If you have any comments or questions, please contact BGA Korea Managing Director B.J. Kim at bjkim@bowergroupasia.com.

Best regards, 

BGA Korea Team 

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Managing Director

B.J. supports BGA clients on the ground in Korea, advising them on stakeholder engagement and larger government affairs and public policy matters in Seoul. A former Korean diplomat, B.J. has advised international firms on political-economic and policy-regulatory affairs since 2003, offering analytical and advisory services on legislative, regulatory and political issues. He also has offered companies hands-on support in their engagement in Korea.  Prior to his career in consulting, B.J. was a diplomat serving two of Korea’s trade ministers as policy counselor and special assistant, developing international economic policies and public communications strategies on export and investment promotion and working ... Read More