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South Korea to Release 2.5m Barrels of Crude Oil From Reserves

Posted on: Friday, 9 September 2005, 03:01 CDT

Text of report in English by South Korean news agency Yonhap

Seoul, 9 September: South Korea's government decided Friday [9 September] to release 2.9 million barrels of crude oil and petroleum products from its strategic petroleum reserves this week to curb oil prices.

According to the Ministry of Commerce, Industry & Energy, the ministry will release 2.5 million barrels of crude oil and 400,000 barrels of gasoline, light-oil and other petroleum products from Saturday until Oct. 10.

Under the plan, the nation's top refiner SK Corp. will receive 850,000 barrels, while GS-Caltex Corp. and S-Oil Corp. will get 750,000 barrels and 725,000 barrels, respectively. Hyundai Oil Refinery Co. will receive 575,000 barrels.

The refiners will be required to return the same kind and quantity of oil within a year, the ministry said. They can also apply for early repayment of the oil or deferment if necessary.

The decision was made at the request of the International Energy Agency, which had ordered each member country to begin releasing 2 million barrels of oil from mid-September to curb rising oil prices. South Korea is one of the 26 member states of the Paris-based agency.

Fears of a sharp oil price hike and a subsequent fall in global economic growth ran high recently as Hurricane Katrina ravaged the Gulf of Mexico late last month generating oil supply concerns.

Helped by the agency's decision on oil release, global oil prices have been falling from early September, with the price of West Texas Intermediate crude declining by 2.02 dollars to 64.9 dollars on Thursday from 2 September, when the agency decided on the release.

Source: BBC Monitoring Asia Pacific

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