Korean, Japanese leaders agree to boost energy cooperation, review oil swap arrangement at Andong summit

South Korean President Lee Jae Myung and Japanese Prime Minister Sanae Takaichi agreed Tuesday to strengthen bilateral cooperation to manage unstable supply chains and energy markets in the wake of the Iran war by securing supplies of crude oil and liquefied natural gas (LNG).  

The two leaders were reunited for a bilateral summit in Lee’s hometown of Andong in North Gyeongsang, a center of Korean traditional culture known for its folk village, a Unesco World Heritage site.

“At today’s summit, building on the trust developed through our shuttle diplomacy to date, Prime Minister Takaichi and I had candid discussions on a broad range of issues as strategic partners in jointly responding to the rapidly changing international environment,” Lee said in a joint press briefing alongside the Japanese leader at a hotel in Andong.  

Takaichi said that in light of international uncertainties, the two sides agreed to review energy cooperation including mutual swap transactions for crude oil, petroleum products and LNG.  

“We agreed that close bilateral cooperation is needed more than ever amid the instability in supply chains and energy markets arising from the recent situation in the Middle East,” Lee said, addressing the U.S.-Israeli war on Iran and the subsequent blockade of the Strait of Hormuz, a crucial global oil chokepoint.  

The two countries agreed to further strengthen cooperation in LNG and crude oil, key energy sources, Lee added.  

“In light of recent international developments, supply chain cooperation between Japan and South Korea, including for critical minerals, is crucial,” Takaichi said during the joint press briefing. “Furthermore, for the realization of a free and open Indo-Pacific and for the benefit of both Japan and Korea, it is important for our countries to coordinate our roles in supporting regional supply chains by enhancing the autonomy and potential of each country.”  

She urged bilateral cooperation centered on two pillars — strengthening energy supply, including the reinforcement of strategic reserves in the Indo-Pacific region, and enhancing energy security through the mutual exchange and transactions of crude oil, petroleum products and LNG.  

Lee said that Takaichi had proposed that Seoul and Tokyo “work closely together to deepen cooperation on resource supply chains with other Asian nations facing supply disruptions,” and that he welcomed the initiative, pledging Korea's active participation.  

Building on a memorandum of understanding to optimize LNG operations signed in March by the state-run Korea Gas Corp. (Kogas) and JERA, Japan's largest power generation company, the two sides agreed to expand LNG cooperation and strengthen channels for information sharing and communication regarding crude oil supply and stockpiling.

Lee said he and Takaichi agreed that “peace and stability in the Middle East should be promptly restored.”  

Both leaders further confirmed the importance of trilateral cooperation among South Korea, the United States and Japan in the interest of regional peace and stability.

Lee emphasized that “as countries in Northeast Asia are closely interconnected across various fronts, including the economy and security, it is essential for South Korea, China and Japan to respect one another, cooperate and pursue shared interests to achieve genuine peace and stability in the region.”

He didn’t directly mention any historical issues stemming from Japan's 1910-45 colonial rule over Korea.  

Regarding North Korea, Lee said he outlined his administration’s vision of “building a peaceful Korean Peninsula where the two Koreas can coexist peacefully and grow together — one where there is no need to fight.”

Lee urged the companies and people of both countries to be at the forefront of efforts to establish a “Global AI Universal Basic Society” by building the foundation for “mutually beneficial and strategic cooperation in AI.”  

Earlier Tuesday, Takaichi arrived at Daegu International Airport for a two-day trip to Korea as part of the so-called shuttle diplomacy between the two countries’ leaders.  

She was greeted by South Korean Second Vice Foreign Minister Kim Jina. Some 170 police officers, 20 patrol cars and 20 motorcycles were dispatched to stand by. Takaichi’s motorcade to Andong was accompanied by a police escort.

Lee and Takaichi last held a summit in January in Japan’s Nara Prefecture, Takaichi’s hometown. The two leaders held their first talks on the sidelines of the Gyeongju Asia-Pacific Economic Cooperation summit in October last year and met again informally at the Group of 20 summit in South Africa last November.  

In Andong, Lee wore a light blue tie that matched Takaichi’s blazer in their fourth meeting over the course of seven months.  

"A storm is currently raging in the international situation,” Lee said in his opening remarks of the summit. "I am realizing just how important a cooperative partner our two countries are to each other as we overcome the difficulties of the international situation together.”

He noted that South Korea and Japan participated together in the Strait of Hormuz initiative, led by Britain and France, to ensure safe and free navigation.  

The Korean Ministry of Trade Industry and Resources and Japanese Ministry of Economy, Trade and Industry agreed to encourage public-private dialogue regarding a swap arrangement on petroleum products, crude oil and LNG, the Blue House said in a statement. 

"Specific implementation plans include crude oil and petroleum product swaps and mutual supply, cooperation in crude oil procurement and transportation, LNG supply" and other measures to strengthen supply chain resilience, and will be announced following consultations between related industry authorities, Kang Yu-jung, the Blue House spokesperson said.  

The two leaders also discussed the results of last week’s summit between U.S. President Donald Trump and Chinese President Xi Jinping.

Lee and Takaichi also focused on their vibrant bilateral exchanges during their 105-minute summit.  

During their talks, Lee highlighted that this “marks the first time leaders of Korea and Japan have visited each other’s hometowns, and it is also something rarely seen anywhere in the world.”

“By conducting shuttle diplomacy in each other's hometowns without a time gap — once in my country and now in Andong — I feel that the friendship and trust between you and me have deepened even further,” Takaichi told Lee during their joint briefing. “I am very happy to be able to visit Andong, a place where rich traditions and culture come alive and surrounded by beautiful nature.”

Later, Lee and Takaichi attended a dinner banquet featuring dishes and ingredients native to Andong.

The two leaders also exchanged gifts, with Lee presenting Takaichi with a framed display featuring nine Hahoe wooden masks, “conveying hopes for the development of friendly bilateral relations,” according to senior Blue House spokesperson Kang Yu-jung.  

Lee also gave black bags inspired by traditional Korean mulberry paper, or hanji, and red ginseng, items symbolic of exchanges during the Joseon Tongsinsa, Korea's goodwill diplomatic missions to Japan between 1607 and 1811 during the Joseon Dynasty (1392-1910). Other gifts included a framed moon jar, regarded as an object of hope in both countries.

Taku Yamamoto, a former member of Japan’s House of Representatives and Takaichi’s spouse, was given a set of snowflake-patterned tableware illustrating the snowy landscapes of Fukui Prefecture, Yamamoto’s hometown.

Andong’s residents prepared separate gifts to welcome Takaichi, including a single-layer blanket made from Andong hemp, symbolizing sincerity and well-being and wishing the prime minister health and peace, and miniature jangseung, traditional Korean wooden poles to protect against evil spirits and diseases.

BY SARAH KIM [kim.sarah@joongang.co.kr]