Mongolian Minister of Industry and Mineral Resources Damdinnyam Gongor and South Korea’s Ministry of Trade, Industry, and Energy have finalized a significant fuel supply agreement. This deal, described as a move to reshape the domestic fuel market, represents a strategic shift for Ulaanbaatar as it seeks greater energy independence.
Under the terms reached on July 30, South Korea will supply Mongolia with 50,000 tons of high-quality petroleum products each month. This volume includes 10,000 tons of jet fuel, 20,000 tons of AI-92 gasoline—which accounts for over 33 percent of Mongolia's total monthly demand—and 20,000 tons of diesel, covering approximately 20 percent of the requirements for the country's logistics and agricultural sectors.
The agreement follows a state visit by South Korean President Lee Jae-myung to Mongolia from July 9-11. During that visit, both nations declared a "New Golden Era" of diplomatic relations and discussed a Comprehensive Economic Partnership Agreement (CEPA) aimed at reducing tariffs. The fuel purchase is now part of a broader collection of 21 cooperation agreements signed during the President's visit, aligning with Mongolia’s goal to diversify its economy away from an overwhelming reliance on Russia and China. Currently, Russia provides over 90 percent of Mongolia’s refined petroleum, with China supplying the remainder.
Mongolia’s energy sector has faced mounting pressure due to global supply chain disruptions near the Strait of Hormuz and instability in Russian supply lines. As Russia manages shortages caused by Ukrainian drone strikes on its refineries, it has been forced to limit diesel exports and seek fuel from Kazakhstan. Meanwhile, domestic demand in Mongolia has surged by two to three times due to the summer season, peak tourism, and intensive agricultural activity. To bolster its energy security, the Mongolian government has also secured an emergency supply of 6,000 tons of gasoline from China. With this new contract, authorities expect South Korea to serve as a reliable guarantor of stability for the country’s aviation industry and gas stations.
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