South Korea says East-West Pipeline closure has limited impact on oil supply
CommodityGeopoliticsMacro Impact 4
South Korea's Ministry of Trade, Industry and Resources said on September 14 that Saudi Arabia's order to shut down the East-West Pipeline is expected to have only a limited short-term impact on oil supply, and pledged to closely monitor the situation together with relevant businesses. Saudi Arabia ordered the closure of the East-West Pipeline, a route that bypasses the Strait of Hormuz, after it was attacked by drones launched from Iraq on Thursday, September 10. The pipeline is 1,200 kilometres long and has a transport capacity of 7 million barrels per day, running from the east coast to the west coast of Saudi Arabia. The ministry held a meeting with the private sector the same day to discuss ways to respond to tensions in the Middle East, and said South Korean refineries have already secured more than 90% of the crude oil they need for September and October compared with last year's levels. MUN SHIN-HAK, Deputy Minister of South Korea's Ministry of Industry, said the government will communicate closely with refineries and shipping operators, closely monitor supply conditions to prevent any impact on the public, and will use all available policy measures, including a crude oil swap system between state reserves and private companies. The government will also provide assistance to shipping operators that want to switch to alternative shipping routes.
