South Korea is exploring a proposal to cooperate with Libya in refining crude oil, aiming to provide gasoline and diesel for the Libyan market and potentially exporting a portion to Seoul. This initiative was discussed during the Libya-South Korea Economic Cooperation Forum held in Tripoli from September 27-28. The proposal seeks to enhance energy cooperation between the two countries, with Libya offering a new source of crude oil for South Korea, which heavily relies on energy imports.
The Libya-South Korea Economic Cooperation Forum focused on revitalizing trade and investment, as well as expanding partnerships between the two nations. The discussions included developing Libya's oil refining capabilities to meet domestic demand for petroleum products and reduce pressures related to fuel supply. In return, South Korea could secure an additional source of crude oil, mitigating its dependence on traditional suppliers in the Middle East.
Tensions in the Hormuz Strait have prompted South Korea to diversify its energy sources. In January, the Middle East accounted for about 70% of South Korea's crude oil imports, with most shipments passing through the strait. This has driven Seoul to explore alternative sources and routes for its energy needs. South Korea has already secured around 273 million barrels of oil through other channels and activated its strategic reserves to address potential supply disruptions.
South Korea has previously expressed interest in cooperating with Libya in the energy sector. In April, South Korea's Deputy Foreign Minister Park Jong-han visited Libya and Algeria to discuss potential crude oil supplies and naphtha. Libya showed willingness to allocate crude oil for the South Korean market, subject to technical and financial conditions.
The proposed cooperation would involve two paths for Libyan crude oil: refining it in Libya to meet domestic demand and exporting a portion to South Korea. While no formal agreement has been announced, the discussions reflect efforts by both countries to expand economic cooperation in the energy sector. This cooperation could also pave the way for broader partnerships between South Korean and Libyan companies.
Economic cooperation between Libya and South Korea spans several decades, with South Korean companies securing contracts worth $36.7 billion in Libya since diplomatic relations were established in 1980. These contracts have primarily been in construction, engineering, and the Great Man-Made River project. South Korea aims to revive and strengthen the presence of its companies in the Libyan market.
Despite this, trade between Libya and South Korea remains limited, with South Korean exports to Libya totaling around $455 million in 2025, and Libyan exports to South Korea amounting to approximately $138 million. The proposed oil refining cooperation could help expand the partnership between the two countries beyond commodity trading to industrial and energy cooperation.
Key points
- South Korea is seeking to diversify its energy sources due to tensions in the Hormuz Strait.
- The proposed cooperation with Libya could provide a new source of crude oil for South Korea.
- The partnership could expand economic cooperation between the two countries beyond energy to industrial and trade areas.
