South Korea and Argentina are accelerating efforts to diversify energy supply sources by ramping up crude oil imports starting next year. President Lee Jae-myung and Argentine President Javier Milei held a summit on the 31st (local time) to discuss practical cooperation in the energy and critical minerals sectors.

The two countries agreed to regularize crude oil imports from next year following a pilot introduction of 880,000 barrels of Argentine crude oil this year, thereby establishing a stable supply chain. The plan aims to significantly enhance national energy security resilience by dispersing the crude oil import structure, which has been heavily concentrated in the geopolitically unstable Middle East, across the South American continent.

▲ From natural gas to nuclear power… Supply chain cooperation to expand significantly

Energy cooperation between the two countries is expected to expand beyond simple crude oil imports to encompass the entire energy sector, including natural gas and nuclear power. As the Milei government is pursuing a policy to increase energy exports by five times the current level, Korea's import volume of Argentine energy is predicted to increase continuously.

Additionally, the two countries signed a 'Critical Minerals Cooperation Memorandum of Understanding (MOU)' to pursue joint projects across the entire value chain, including exploration, mining, and processing of lithium, a key material for secondary batteries. This is interpreted as a strategic move to ensure stable procurement of critical raw materials amid global supply chain realignment.

▲ Tax treaty finalized… Opening pathways for Korean companies' expansion into South America

The institutional foundation for improving the investment environment has also been substantially strengthened. Following this summit, the 'Avoidance of Double Taxation Agreement' was finalized, reducing the tax burden on Korean companies operating in Argentina and significantly enhancing investment predictability.

President Milei highlighted the achievements of the Argentine government's strong push for regulatory reform and enhanced property rights protection systems, urging active investment from Korean companies. To support this, the two countries will reactivate the Joint Economic Committee and the Energy and Resources Cooperation Committee, and agreed to expedite the resumption of Korea-Mercosur trade agreement negotiations.

Korea-Argentina Summit (Photo : [Yonhapnews provided])

▲ Pragmatic diplomacy centered on economy… Focusing on economy and AI beyond Korean Peninsula issues

This summit is noteworthy for moving away from traditional security-focused issues and concentrating on practical economic cooperation. Unlike the summit with Brazil where the Korean Peninsula peace process was a major agenda item, the Argentina summit focused on future industrial cooperation including economy, energy, and AI as central topics.

Despite changing political currents among major South American countries including Argentina and Brazil, the trade cooperation framework within Mercosur is expected to remain unwavering. The two countries plan to continuously manage the outcomes of this summit through reactivated annual consultative bodies and continue to discover new cooperation projects.