Amid ongoing uncertainty in the Middle East, the government will resume its oil reserve swap program starting this week to address delays in oil imports. Concerns over maritime transport disruptions in the Red Sea and other areas have led to the anticipation that some oil shipments scheduled for September may be delayed until October.
Additionally, emergency supply measures for naphtha and petrochemical raw materials will be effectively extended until January of next year.
According to relevant government departments on the 25th, the Ministry of Trade, Industry and Energy plans to implement the oil reserve swap program in phases starting this week. A ministry official stated, "We will proceed with the oil reserve swap in order of requests from companies starting this week."
The oil reserve swap allows domestic refiners to borrow government-held oil reserves until their alternative crude oil, secured from abroad, arrives in the country. Once the alternative crude is delivered, refiners are required to return the borrowed reserves to the government.
The government had previously suspended the oil reserve swap program in June after implementing it in response to disruptions in oil imports following the outbreak of conflict in the Middle East. However, it has decided to reinstate the program due to concerns that even contracted oil shipments may experience delays in arrival.
Recent reports indicate that the Houthi rebels, an Iran-aligned group in Yemen, have claimed responsibility for striking a Saudi oil tanker off the coast of Yanbu, reigniting fears of instability in the region. As a result, vessels are rerouting to avoid dangerous waters, extending the transportation time for oil. There is a possibility that shipments originally scheduled for September may now extend into October.
The government plans to use the oil reserve swap to fill any temporary supply gaps that may arise due to these delays. A ministry official explained, "We have not predetermined the amount for the swap; it will be based on requests from companies."
With the situation in the Middle East remaining uncertain, the government also approved emergency supply measures for naphtha and petrochemical raw materials during a cabinet meeting on the same day. The existing measures were set to expire on the 26th, but ongoing sporadic military clashes and price volatility in the region prompted the extension.
This action is not merely an extension of existing measures but involves re-establishing similar provisions. Consequently, reporting obligations for naphtha production and sales, restrictions on hoarding, export limitations, and potential supply adjustments will remain in effect. Similar restrictions may also be applied to key raw materials for petrochemical products.
A ministry official noted, "We will implement measures based on the maximum allowable period of five months under the law, and if the situation stabilizes and supply becomes smooth, we will consider ending the measures early before the period concludes."
* This article has been translated by AI.
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