South Korea will restrict naphtha exports starting Friday due to supply shortages from the Middle East conflict. The measure follows U.S. and Israeli airstrikes on Iran that have effectively closed the Strait of Hormuz. The government plans support including expanded low-interest loans for domestic firms.
SEOUL — South Korea's Ministry of Trade, Industry and Resources announced Thursday that it will enforce naphtha export restrictions starting midnight Friday after publication in the official gazette, lasting five months. The measure redirects about 11 percent of domestically produced naphtha, currently exported, to local buyers amid shortages triggered by the Middle East conflict. Roughly half of South Korea's naphtha imports pass through the Strait of Hormuz, now effectively closed due to the war following U.S. and Israeli airstrikes on Iran. The crisis, which began in late February, is entering its fourth week. To aid domestic naphtha-handling companies, the government will expand low-interest loans via its supply chain fund and consider raising import credit limits if needed. At an emergency economic meeting chaired by President Lee Jae Myung, Finance Minister Koo Yun-cheol stated, “As the Middle East crisis enters its fourth week, the economic impact, such as higher prices, supply disruptions and heightened volatility in the foreign and financial markets, is increasingly evident.” Industrial Resources Security Bureau Director General Yang Ki-wook said during a briefing, “The goal is to keep available supplies within the country.” He noted exceptions may apply for certain heavy naphtha varieties not used domestically and dismissed trade dispute concerns, saying, “We believe the likelihood... is low.” Separately, a ban on hoarding urea and urea solution takes effect Friday, prohibiting importers, manufacturers and sellers from holding over 150 percent of last year's monthly average sales for more than seven days or refusing sales without valid reason.
