South Korea Halts Naphtha Exports Amid Middle East Conflict

South Korea has implemented a temporary ban on naphtha exports to stabilize domestic supply due to disruptions from the Middle East conflict. The measure redirects export volumes to local markets. Alternative imports and further restrictions on petrochemical products are being considered as authorities prioritize essential sectors.

In response to disruptions caused by the Middle East conflict, South Korea has commenced a five-month ban on naphtha exports, effective from midnight Thursday. This government-mandated measure aims to prioritize domestic demand by reallocating export volumes locally, ensuring critical sectors like healthcare and core industries are not impacted.

South Korea is heavily reliant on the Middle East for 77% of its naphtha imports, which account for 45% of its total demand. The government plans to redirect the 11% of domestically produced naphtha that is usually exported, bolstering supplies for domestic consumption and stabilizing the market, ministry sources confirmed.

Discussions are underway among government and industry leaders. Consideration is being given to extend export restrictions to other petrochemical products. In light of the halted trade with Russia since 2022, the exploration of potential Russian crude oil and naphtha imports has commenced.

(With inputs from agencies.)