Seoul: The government announced on Tuesday its initiative to secure oil supplies from regions outside the Middle East, prompted by the de facto closure of the Strait of Hormuz. This move comes amid ongoing U.S. and Israeli strikes on Iran, while emphasizing that South Korea maintains sufficient oil reserves.
According to Yonhap News Agency, the Ministry of Economy and Finance held an emergency response meeting regarding the Iran conflict, collaborating with related ministries to evaluate the impact on South Korea and devise a response strategy. The ministry assured that no safety issues have been reported involving Korean vessels in the Middle East and confirmed that the country possesses adequate oil reserves should the crisis be prolonged.
In anticipation of a potential full blockade of the Hormuz strait-considered the world's most critical oil export route-the government plans to secure additional oil supplies from regions beyond the Middle East. South Korea's energy dependence on shipments through the strait is significant, with approximately 70.7 percent of its oil and 20.4 percent of liquefied natural gas sourced from the Middle East.
On Monday, the Islamic Revolutionary Guard Corps announced the closure of the Strait of Hormuz and issued threats against ships attempting to navigate the waterway, as reported by Iran's state media. In response, the ministry committed to monitoring both domestic and global energy and financial markets continuously, ready to deploy a market stabilization program valued at a minimum of 100 trillion won (US$68.4 billion) if necessary.
The Korea Composite Stock Price Index (KOSPI) experienced a sharp decline of over 7 percent on Tuesday, reflecting growing anxieties over the Iran situation. Although international oil prices have been volatile, the rate of price increase has decelerated, according to the ministry.
The government also pledged to act decisively against unfair market practices, including the spread of fake news aimed at exploiting investor sentiment. Vice Budget Minister Lim Ki-keun instructed officials to closely monitor government budget execution concerning export firms, shipping companies, and overseas Korean nationals to mitigate crisis-related damages.
Industry Minister Kim Jung-kwan separately convened a meeting to address the Middle East crisis, deciding to implement preemptive support measures for around 1,000 firms exporting primarily to the Middle East. The support package includes export vouchers and liquidity assistance. On the energy supply front, Kim directed officials to prepare for the potential release of oil reserves should supply conditions deteriorate, while also working to secure alternative gas supplies from outside the Middle East.
Despite these developments, the impact of the Iran conflict on Korea's energy supply, maritime logistics, and supply chains remains limited for now, as explained by the ministry.