RESEARCH NOTES

KBR Research Notes

100 Days of the Hormuz Blockade: Can South Korea's 200 Days of Strategic Reserves Hold Out, and When Will Oil Prices Stabilize?

South Korea's combined government and private oil reserves stand at 200 days (ranking 6th globally by IEA standards), successfully shielding the nation from short-term supply and demand shocks. However, government reserves fell to around 80 million barrels following a record release of 22.46 million barrels in March. International crude oil prices peaked at $119 per barrel for Brent crude on March 8 and have since declined to the $90 range as of June, but remain over 50% higher than pre-crisis levels ($50-$60 range). May consumer inflation rose 3.1% year-on-year, the highest in two years and two months, with petroleum products alone surging 24.2%. Experts predict it will take at least six months for the perceived stabilization of inflation even after oil prices settle. Goldman Sachs and Morgan Stanley project Brent crude to settle at $90 by year-end based on a baseline scenario of resumed passage by late June, whereas RBC and IEA warn that cumulative supply losses could reach 1.5 billion barrels if the blockade is extended. This crisis has reconfirmed South Korea's structural vulnerability, with a 69% dependence on Middle Eastern crude and over 95% of it passing through Hormuz. Consequently, diversifying import sources and securing alternative shipping routes are more urgent tasks than ranking 6th in reserve days.