South Korea, the world's fifth-largest crude oil importer, said on Thursday it had reached a deal with Iraq under which it would receive at least 250,000 barrels per day (bpd) of crude in an emergency situation, according to a report from Reuters.
The supply is equivalent to about 10 percent of South Korea's total 2.4 million bpd of crude oil imports.
"The emergency situation refers to when South Korea cannot purchase crude oil even with money, and this deal is to ensure stable supply," a ministry official said.
U.S. crude prices have jumped more than 20 percent so far this year and consumers in the world's largest economies are starting to show the strains of higher fuel costs.
Global benchmark U.S. crude futures rose to their highest in 2-1/2 years on Thursday, as the Federal Reserve appeared in no rush to tighten monetary policy, weakening the dollar, and as gasoline stockpiles fell more than double than what was forecast.
NYMEX crude for June CLc1 rose 66 cents to $113.42 a barrel by 0316 GMT, after rising as high as $113.70. London Brent crude LCOc1 gained 55 cents to $125.68 a barrel.
The ministry statement also said priority would be given to South Korean firms to procure crude oil from the Middle Eastern oil producer under a long-term contract, if they want.
South Korean President Lee Myung- bak and Iraqi Prime Minister Nouri al-Maliki held talks Thursday over bolstering bilateral economic ties.
Last year, South Korea imported 60 million barrels of crude oil from Iraq, or about 7 percent of its total crude import of 872 million barrels, the statement said.
(Sources: Reuters, Xinhua)