How Does South Korea Import Oil from the Landlocked Central Asian Nation Kazakhstan? The Trilateral Swap Agreement Between China, South Korea, and Kazakhstan

The Strait of Hormuz is a globally critical energy strategic waterway, through which approximately 20% of the world’s oil, petroleum products, and liquefied natural gas are transported.

On the morning of April 8, U.S. President Trump announced a two-week ceasefire agreement between the United States and Iran. Subsequently, Iranian Foreign Minister Zarif stated that navigation through the Strait of Hormuz had resumed.

South Korea, a highly developed Asian economy, relies on the Strait of Hormuz for about 61% of its crude oil imports and 54% of its naphtha imports. The "U.S.-Israel war against Iran" has disrupted global energy supply stability. In response, South Korea dispatched a high-level delegation to Kazakhstan, Oman, and Saudi Arabia to seek alternative supply sources. It is expected that talks scheduled in Astana will focus on industrial-grade oil and naphtha.

However, despite being rich in hydrocarbons, Kazakhstan is a landlocked country and does not share a border with South Korea on the Korean Peninsula. Theoretically, South Korea could utilize major westward export arteries such as the Caspian Pipeline Consortium (CPC) and the Baku-Tbilisi-Ceyhan (BTC) pipeline across the Caspian Sea, sending tankers to distant Black Sea and Mediterranean ports before rerouting around the Cape of Good Hope in South Africa to return to South Korea. The main drawback of this route is its excessive time consumption and logistical inefficiency, making it commercially unviable.

Is there an economically feasible transportation route? Indeed, there is: the trilateral swap agreement among China, South Korea, and Kazakhstan. South Korea and Kazakhstan have no shared border and no existing pipelines directly connecting them. However, pipelines do link Kazakhstan to China. Under the swap agreement, oil exported from Kazakhstan to China will be matched by an equivalent volume of oil exported from China to South Korea.

This trilateral swap mechanism has already been implemented among Turkmenistan, Iran, Turkey, and Iraq, creating new export routes for Turkmenistan—a nation rich in natural gas resources.

The ongoing Middle East conflict has once again stirred geopolitical energy dynamics between Central Asia and East Asia.

Kazakhstan recently announced six newly discovered oil fields in its western region, with total reserves exceeding 127 million tons, scheduled to be included in the national oil reserve by 2025. A major oil and gas field was discovered in the Atyrau region, whose reserves may rival those of Kazakhstan’s largest oil field, Kashagan.

On April 8, Kazakh President Kassym-Jomart Tokayev met with South Korea’s presidential envoy and Presidential Secretary General Kang Hoon-ji. During their meeting, both sides exchanged views on several key issues within the bilateral agenda, including the potential for further cooperation in energy, transportation, logistics, and other sectors amid current challenges in the global market.

A political consultation between the Ministry of Foreign Affairs of Kazakhstan and that of China took place in Astana on the 7th. The meeting emphasized the need to develop joint plans for industrial and investment cooperation, energy, transit transport, and innovation, including increasing non-resource exports from Kazakhstan to China.

Besides South Korea, Japan and Southeast Asian nations are also turning their attention toward hydrocarbon-rich Central Asia. While the ideal scenario looks promising, reality remains challenging—trilateral swaps depend heavily on political trust between the two bilateral partners.

Source: Compiled from reports by Diplomatic Analysts, Central Asia Times, and Kazakhtelegram media outlets, via "Linguistics Study | Translation"

Original Article: toutiao.com/article/1860175467648000/

Disclaimer: This article represents the personal views of the author