South Korea enforces naphtha export ban amid Middle East supply disruptions

2026-03-27 - 04:40

South Korea relies on imports for about 45% of its naphtha demand, with 77% sourced from the Middle East. (KED pic) SEOUL: South Korea began enforcing a ban on naphtha exports from midnight on Thursday as it moved to shore up domestic supplies amid disruptions caused by the conflict in the Middle East, the industry ministry said. The move requires refiners to divert export volumes to the local market and give the government powers to order production and allocation of naphtha, a key petrochemical feedstock used in chips, autos, plastics and everyday goods. South Korea relies on imports for about 45% of its naphtha demand, with 77% sourced from the Middle East, making supplies particularly vulnerable to the regional conflict, the ministry said. Data from the ministry and Korea National Oil Corporation shows South Korea exports about 11% of its domestically produced naphtha, volumes that authorities said will now be redirected to domestic users to stabilise supply. The ban will remain in place for five months, with priority supply ensured for healthcare, core industries and essential consumer goods, the ministry said. Last week, the South Korean government said it discussed with local companies the potential imports of Russian crude oil and naphtha, after halting oil trade with Moscow since 2022. South Korea’s LG Chem said earlier this week it would temporarily shut down its naphtha cracker in the country, citing difficulties in securing naphtha feedstock. The company’s CEO thanked the government on Thursday for supporting the purchase and payment of Russian naphtha. The government is also reviewing whether to extend export controls to petrochemical products, according to the industry ministry. “Naphtha exports have been banned at the government level, and we are giving very serious consideration to petrochemical products as well,” Park Dong-il, head of industrial policy at the ministry, said at a round-table meeting with company representatives on Friday. Responding to calls to redirect domestically produced petrochemical products like ethylene and synthetic resin for local use, Park said the government would “review the matter swiftly”.