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LG Chem secures 27,000 tons of Russian naphtha

Published: 30 Mar. 2026, 20:11

LIM JEONG-WON
[email protected]

A warehouse at a plastic film plant in Ansan is partially empty on March 24, amid supply disruptions caused by the war in the Middle East. [YONHAP]

LG Chem, Korea's leading chemical company, has secured 27,000 tons of naphtha from Russia amid a potential supply shortage caused by the war in the Middle East, the Industry Ministry and business sources said Monday.

The naphtha imports, a key feedstock widely used in the petrochemical and other industries, are set to arrive in the country later in the day and will head for the Daesan industrial complex, a major petrochemical complex in South Chungcheong, according to the sources.

The imported volume falls far short of the average 4 million tons used in the country each month, but it marks the opening of an alternative supply route through cooperation between the private sector and the government amid the war.

Naphtha is used to produce a wide range of goods, including plastics, packaging materials, automotive parts, synthetic fibers, home appliances and everyday consumer products.

The move by LG Chem was made possible after the United States temporarily eased sanctions on Russia's petroleum products.

Korean firms had previously been reluctant to import Russian naphtha due to sanctions linked to the Russia-Ukraine war, particularly the risks associated with financial transaction restrictions and potential secondary sanctions.

A notice on limited purchases of garbage bags is seen at a large supermarket in Seoul on March 30, as naphtha supplies have been disrupted due to the ongoing Iran war. [NEWS1]

To facilitate the deal, the government held consultations with the U.S. Treasury Department and other relevant authorities. It secured confirmation that payments could be made using currencies other than the dollar, such as the ruble, and that the transaction would not be subject to secondary sanctions.

The move also reflects Korea's structural vulnerability in naphtha supply. Seoul relies on imports for about 45 percent of its demand, with roughly 77 percent sourced from the Middle East, leaving it exposed to geopolitical risks such as a potential disruption in the Strait of Hormuz.

Officials cautioned, however, that Russian imports may not provide a long-term solution.

"The current sanctions relief is valid only until April 11," a ministry official said, adding that it remains uncertain whether stable supply conditions can be maintained beyond that point.

BY LIM JEONG-WON, YONHAP [[email protected]]