Gov‘t halts naphtha exports for 5 months to stabilize supply

Mar 27, 2026, 09:49 am

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A storage facility for polyethylene and other materials appears partially empty at a plastic film manufacturing plant in Ansan, Gyeonggi Province, on March 24, amid supply disruptions caused by instability in the Middle East. / Yonhap

The South Korean government has moved to restrict naphtha exports for five months through the end of August, as it ramps up efforts to stabilize supply amid disruptions caused by the Middle East conflict.

According to the Ministry of Trade, Industry and Energy, the export restriction took effect at midnight on March 27, following Cabinet approval earlier this week.

Naphtha, a key feedstock used to produce petrochemical materials for industries such as semiconductors and automobiles, plays a critical role in the industrial supply chain. South Korea relies on imports for about 45% of its naphtha demand, with 77% of imports coming from the Middle East.

Under the new measures, naphtha exports are, in principle, prohibited, including previously contracted shipments. Exceptions may be granted with approval from the industry minister if the material cannot be utilized domestically.

Officials said the policy is part of a broader package aimed at stabilizing supply rather than a standalone export ban.

In addition, refiners and petrochemical companies are now required to report daily data on naphtha production, imports, usage, sales, and inventory to the government, enabling close monitoring and real-time supply management.

The government warned that prolonged shortages could affect a wide range of everyday products, including engine oil, paint, and even garbage bags.

Authorities said supply is expected to remain stable through April, but availability for May will depend on procurement secured in April. The government plans to adjust supply measures as needed based on daily monitoring.

Further interventions may include orders to increase production or direct supply to specific petrochemical companies if conditions worsen.

The government has also designated naphtha as a key economic security item, allowing companies to receive financial support such as low-interest loans through supply chain funds, as well as assistance in securing alternative import sources.

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