Korea eases diesel export cap to 110%

South Korea will ease export restrictions on diesel from November, allowing refiners to ship up to 110 percent of the volume recorded in the same month a year earlier. The move lifts the current cap of 100 percent that has applied since March, when an oil price ceiling and related export limits were introduced to safeguard domestic supply.

The higher cap will apply only if domestic supply remains stable, with refiners required to fulfill local supply obligations and maintain adequate inventories. Authorities emphasize that exports must stay within a range that does not disrupt domestic supply and demand.

Export limits on covered petroleum products were introduced on March 13 alongside the maximum oil sales price system. Since then, refiners have been restricted to export volumes no greater than 100 percent of the same month a year earlier, a measure designed to prevent shortages at home.

The Ministry of Trade, Industry and Resources notes that crude imports for October and November have been secured at more than 100 percent of the previous year’s monthly average. This secure crude supply underpins the decision to relax diesel export curbs while aiming to keep domestic markets stable.

Following the introduction of the price ceiling, domestic diesel consumption declined and inventories increased. Cumulative diesel consumption from the second week of March to the third week of October fell 7.2 percent, and authorities assess that inventories are sufficiently secured.

At the same time, a continuing global diesel shortage and requests from the refining industry to ease restrictions have created an incentive to channel surplus domestic volumes into exports. The government’s adjustment seeks to make use of these surplus barrels while prioritizing local supply security.

The change is based on the proviso to Article 8 of the Regulations on the Designation of Maximum Oil Sales Prices and the Restriction of Excessive Exports. From this week, the ministry will accept applications from each refiner for additional export demand and apply approved amounts to November export volumes.

The export cap may also be adjusted when a foreign government formally requests specific petroleum product supplies, including product types, quantities and supply periods. In such cases, authorities will assess whether any additional shipments serve the national interest, comply with international sanctions and remain within a range that does not disturb domestic supply and demand.

Officials state that, with tensions in the Middle East lingering, the government will closely monitor supply and demand conditions after the measure takes effect. If signs of deterioration in domestic supply appear, the previous export cap standard will be immediately reinstated and the policy managed flexibly in line with market conditions.