South Korea to release record 7.23 million barrels of strategic petroleum reserves

South Korea has decided to release record 7.23 million barrels of strategic petroleum reserves in addition to its recent commitment of 4.42 million barrels in an effort to cool surging oil prices and tame accelerating inflation, the energy ministry said April 8.

"The 7.23 million barrels marks the biggest-ever in South Korea's release of SPR," the Ministry of Trade, Industry and Energy said in a statement.

This also marks the third-biggest volume for an individual country in the International Energy Agency's commitment to release 120 million barrels, which includes 60.56 million barrels committed by the US and 15 million barrels by Japan.

In early March, the government decided to release 4.42 million barrels of SPR, part of the IEA's earlier commitment of 62.7 million barrels of SPR release.

"The government is currently releasing the 4.42 million barrels to the local market," the MOTIE said.

The releases of strategic petroleum reserves -- 11.65 million in total -- is in line with moves by member counties of the International Energy Agency to stabilize the global oil market in the face of the Ukraine-Russia tensions.

"The government's decision aims to seek stability in the energy market both at home and abroad so as to reduce the burden of our people and the economy amid the prolonged Ukraine crisis and soaring energy prices," the MOTIE said in a statement. It refused to say how many crude and refined products in the releases.

After this round of release, the country would still hold strategic reserves of more than 90 days' worth of the country's oil demand recommended by the IEA, which are enough to cope with any disruption crisis, the MOTIE said.

South Korea already released 3.17 million barrels of SPRs –- 2.08 million barrels of crude oil and 1.09 million barrels of refined products –- from January to March this year, joining the US-led drive to bring down international crude prices.

The three rounds of SPR release amounts 14.82 million barrels in total. The ministry refused to disclose exact number of barrels left in the country's SPR tanks.

However, given its previous releases of 3.17 million barrels plus 4.42 million barrels, South Korea is believed to hold 89.41 million barrels of SPRs currently, which means the country would have 82.18 million barrels after this round of release of 7.23 million barrels.

Earlier this week, the government decided to expand oil tax cuts to record 30% from 20% currently, for three months from May as part of efforts to ease upward pressures on inflation and surging energy prices.

The government has lowered taxes on auto fuels such as gasoline, diesel and LPG by 20% for six months from November last year, and extended tax cuts by three months until end-July.

In the face of prolonged high crude oil prices over the Russian-Ukraine war, the government has decided to expand the tax cuts to 30% from May 1 to July 31.

The decision came as South Korea's consumer prices grew 4.1% in March from a year earlier, marking the fastest price growth in more than 10 years. In particular, the prices of oil-related products jumped 31.2% year on year.