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State oil firm under audit over foreign-owned oil shipped from Korean storage site

Published: 20 Mar. 2026, 20:27

Coast Guard officers conduct a crackdown on illegal marine fuel distribution aboard a refueling vessel at Busan Port on March 19. [YONHAP]

The government on Friday launched an audit into Korea's state-run oil company after discovering that 900,000 barrels of crude oil stored at a local strategic oil storage facility had been sold overseas, the Ministry of Trade, Industry and Resources said.

The audit into the Korea National Oil Corporation (KNOC) came after officials discovered that the crude oil, reportedly owned by an undisclosed Middle Eastern oil company, had been sold to an unidentified buyer in Southeast Asia, the Trade Ministry said.

KNOC leases the storage facility in Ulsan to foreign oil companies to store crude oil and petroleum products as part of an international stockpiling program.

Under the arrangement, Korea has priority purchase rights to the stockpiles in the event of supply disruptions.

The government uncovered the sale as the country is striving to minimize oil supply disruptions amid the Middle East conflict and the effective closure of the Strait of Hormuz.

The ministry said the audit will examine whether there were any legal violations in the overseas sale of the oil before Korea could exercise its priority purchase rights.

"It is impossible to recover the 900,000 barrels now," a ministry official said. "We will strictly hold those accountable if they are found to have violated regulations."

KNOC reportedly claims that it did not see the need to exercise the priority purchase rights as the Middle Eastern oil company had signed a supply contract for 2 million barrels of crude with a Korean refiner earlier this month.

The foreign oil company stored the 2 million barrels in Ulsan storage tanks as scheduled, but reportedly sought to capitalize on soaring oil prices by selling the entire shipment to another buyer offering a higher price, according to industry sources.

KNOC has secured the supply rights for the remaining 1.1 million barrels.

Yonhap