South Korea and Australia have agreed to strengthen co-operation in the energy sector as the countries deal with fuel supply disruption from the Iran war.
Both countries decided to “maintain a stable, secure and reliable supply of diesel and other liquid fuels” following a meeting in Seoul on Thursday between Australian Foreign Minister Penny Wong, her South Korean counterpart Cho Hyun, and Energy Minister Kim Jong-kwan.
Wong’s visit to Seoul is part of a three-country tour that also includes China and Japan, as Australia co-ordinates with regional powers on energy security.
Crude oil prices have soared since the US-Israeli began its attack on Iran on February 28, which resulted in Tehran effectively closing the Strait of Hormuz, through which a fifth of the world’s oil flows.
Australia and South Korea also agreed to notify and consult each other in the event of potential trade disruptions amid “deep concern” about the impact of the situation in the Middle East on key sectors of raw materials, according to a joint statement.
“The central pillar of our Comprehensive Strategic Partnership is a long and trusted economic and energy resource partnership, grounded in a shared commitment to open markets and rules-based trade, which underpins our prosperity and economic security,” the countries said.
Canberra is Seoul’s main supplier of liquefied natural gas, as well as an important supplier of critical minerals, while South Korea provides Australia with refined petroleum products and diesel.
South Korea was a key energy partner of Australia as the largest supplier of diesel and third-largest source of jet fuel, Wong said.
“We depend on you, and you depend on us,” Wong said, in describing the need for close co-ordination and Australia’s commitment as a reliable supplier of food, energy and other commodities to South Korea.
South Korea is particularly vulnerable to the conflict in Iran, as it imports 70 per cent of its crude oil from the Middle East, with more than 95 per cent of these volumes passing through the Strait of Hormuz.
It also obtains 20 per cent of its liquefied natural gas from the region.
In Beijing on Wednesday, Wong said the Chinese government agreed to co-operate with Australian businesses on jet fuel shipments.
“We believe this is an important step, but it is the first step,” Wong told reporters in Beijing, adding that the aim of her trip was to press for Chinese co-operation “in particular for the provision of liquid fuels”.
In a meeting with her Chinese counterpart Wang Yi, Wong said she “made the point that the imports China supplies to Australia, including jet fuel, support the Australian resources sector, which in turn helps to maintain the flow of commodities” that are crucial to the bilateral trading ties.
with Reuters
