South Korea's LG Chem to import Russian naphtha
- LG Chem to import 27,000 tons of naphtha
- Imports are first from Russia under loosened US sanctions
- South Korea's imports from Gulf hit by Iran war
South Korea's LG Chem will import 27,000 metric tons (t) of Russian naphtha on Monday, a person familiar with the matter said, marking the first South Korean purchase of naphtha from Russia since the United States eased sanctions.
The country's Industry Ministry had earlier confirmed the shipment, including its size, but did not disclose the importing company's name.
LG Chem, one of South Korea's leading petrochemicals firms, declined a request for comment.
Earlier this month, Washington issued a 30-day waiver for countries to buy sanctioned Russian oil and petroleum products stranded at sea, in an effort to stabilize global energy markets roiled by the Iran war.
The source, who declined to be named due to the confidentiality of the contract, said LG Chem is seeking to secure additional supplies of Russian naphtha, although it is unsure if that will be possible.
The Industry Ministry said Korean companies are also trying to secure Russian crude oil, although no concrete plans are yet in place.
IRAN WAR DISRUPTS SOUTH KOREA'S IMPORTS FROM THE GULF. Naphtha is a refined oil product typically used as a feedstock for petrochemicals used in industries including the semiconductor and automobile sectors. South Korea relies on imports to satisfy about 45% of its naphtha demand, with 77% of that typically sourced from the Middle East, according to the Industry Ministry.
Iran effectively closed the Strait of Hormuz, a conduit for a fifth of the world's oil and gas supplies, after the U.S. and Israel attacked it last month, starting the war.
South Korea said last week that it had confirmed with the U.S. that it can pay for Russian oil products, including naphtha, in currencies other than the dollar without facing secondary sanctions.
South Korea also began enforcing a ban on naphtha exports from midnight on Thursday as it moved to shore up domestic supplies.
Ruling party lawmaker Ahn Do-geol, who attended a meeting of government officials and lawmakers on the war's economic impact, told reporters the country also faced a shortage of synthetic resin used to create plastic products and adhesives, and the Industry Ministry was looking into measures such as limiting exports to secure stock.
The government is devising measures to prioritize important sectors - including healthcare, where plastics are used in a wide variety of ways including during medical procedures - and daily necessities should the war continue, lawmakers said on Monday.
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