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| ▲ This Reuters' file photo shows an aerial view of the Iranian shores and the island of Qeshm in the strait of Hormuz on Dec. 10, 2023. (PHOTO NOT FOR SALE) (Yonhap) |
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| ▲ Second Vice Foreign Minister Kim Jina (R) presides over a meeting to review the situation in Iran following U.S.-Israel strikes on the Middle Eastern country at the ministry headquarters in Seoul on Feb. 28, 2026, in this photo provided by the ministry. (PHOTO NOT FOR SALE) (Yonhap) |
(LEAD) industry ministry-Iran crisis
(LEAD) Gov't reviews economic impact of Iran crisis, checks readiness to release oil reserves
(ATTN: ADDS more info in paras 6, 12)
SEOUL, March 1 (Yonhap) -- The industry ministry said Sunday it is preparing for all contingencies, including a possible closure of the Strait of Hormuz, amid escalating tensions surrounding Iran, adding the impact on shipping logistics currently remains limited.
The Ministry of Trade, Industry and Resources held an emergency meeting with relevant ministries and institutions to assess the economic and industrial impact of the massive U.S.-Israeli strike on Iran the previous day, which came amid stalled talks over Tehran's nuclear program.
The attack reportedly killed Iran's Supreme Leader Ayatollah Ali Khamenei.
Given recent developments, authorities need to mobilize all available measures based on various scenarios to minimize economic fallout, particularly in the event of a blockade of the Strait of Hormuz, by closely managing oil tanker schedules and securing alternative shipping routes, the ministry said.
The Strait of Hormuz is the world's most critical oil export route, linking the Persian Gulf to global markets. South Korea, which relies heavily on energy imports, could be especially vulnerable to disruptions in the waterway.
Using alternative routes could push maritime freight rates up by as much as 80 percent compared with current levels, and delivery times could be extended by three to five days, according to the Korea International Trade Association (KITA).
South Korea currently holds several months' worth of strategic oil reserves, along with gas inventories exceeding mandatory stockpiling requirements.
The ministry said it will release strategic oil reserves into the domestic market following internal reviews should the crisis become prolonged and private-sector crude inventories fall below a certain threshold.
The government also plans to roll out supportive measures for exporters, such as liquidity assistance and logistics cost support through export vouchers and other aid programs, as prolonged instability could have broader ripple effects on exports through higher oil prices and freight costs.
If shipping disruptions intensify, authorities will consider additional steps, including deploying temporary vessels, according to the ministry.
So far, the impact of the Middle East conflict on maritime logistics has been limited, it said, adding most major container carriers have been rerouting around the Cape of Good Hope since the Red Sea crisis in 2023, instead of using the Suez Canal.
South Korea's exports to the seven countries adjacent to the Strait of Hormuz account for 1.9 percent of its total outbound shipments, according to government data.
The ministry vowed to continue enhanced real-time monitoring through its emergency response task force established Saturday while closely coordinating with relevant agencies.
The government also pledged to minimize the possible impact of oil price fluctuations on domestic energy prices and overall inflation.
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