SEOUL, March 22 (Reuters) - South Korea would support a release by industrialised countries of oil from strategic reserves to help stem high prices, but has yet to receive a request from the International Energy Agency or its members to do so, a government source said on Thursday.
Britain and the United States are considering a release of oil from reserves to prevent oil prices choking economic growth. High gasoline prices in top oil importer the United States are hurting consumers and a political issue for President Barack Obama during an election year.
Not all of the IEA’s 28 members support a release. France and Germany oppose such a release, officials from both countries said on Tuesday. They believe reserves should be used to offset supply disruptions rather than to tame high oil prices.
The IEA represents the energy interests of its members, which include South Korea, the world’s fifth-largest oil importer, and has previously coordinated stock releases.
“If an official request is made by either the IEA or the U.S. for an inventory release, there is no reason we would oppose it under current circumstances, as South Korea is more affected by high oil prices now than many other countries,” a source at South Korea’s economy ministry told Reuters by telephone. “We would consider such a request positively... it would help to pull down high oil prices.”
The source declined to be identified as he was unauthorised to talk to the media.
Asia’s fourth-largest economy depends on energy imports to fuel its export-driven heavy industry. Consumers are facing record domestic fuel prices, as retail prices are driven higher by the global rally of international oil prices this year.
Benchmark Brent crude traded above $123 a barrel on Thursday and is up more than 15 percent this year. Brent rose as high as $128 in early March, its highest since an all-time high of just over $147 in July 2008.
Aside from high prices, South Korea is also facing the prospect of U.S. sanctions if it fails to significantly cut imports from Iran, which may further drive up its import costs.
Seoul and Washington will soon hold another round of talks to discuss reductions in South Korea’s hefty imports of Iranian oil.
According to an economy ministry statement on Wednesday, the Korean government holds crude and product stocks equivalent to 100 days of consumption.
South Korean refiners and distributors also hold commercial oil stocks equivalent to 85 days of consumption.
Some Korean media and civic groups have been pressuring the government to lower oil taxes on gasoline and diesel, while criticising refiners’ hefty profits.
South Korea also goes to the polls this year, with a general election in April and presidential vote in December.
Last June South Korea joined in the release of 3.46 million barrels of oil as part of an IEA-coordinated effort to tame high global oil prices after Libya’s output was cut by civil war. (Reporting by Meeyoung Cho, editing by Simon Webb)