Daily Inspection System Activated to Prepare for Rapidly Changing Situations
The government held a comprehensive situation review meeting on the 4th with related agencies and industries as the situation in the Middle East rapidly deteriorated due to Iran's missile attacks on Israel, to assess the impact on our industries in terms of energy supply and prices, exports and imports, and supply chains, including oil and gas.
According to the Ministry of Trade, Industry and Energy, oil prices showed an upward trend for two consecutive days following Iran's attack on Israel. On the day of the attack, the 1st, the international oil price (Brent crude) rose 2.6% from the previous day to $73.5 per barrel, and on the 2nd, it increased by 0.5% to $73.9. A ministry official explained, "Whether the upward trend in oil prices continues will depend on the responses of major countries such as Israel," adding, "Gas prices are being maintained stably as major countries around the world hold sufficient inventories."
The impact of the Middle East situation on our industries in terms of oil and gas supply and demand, exports, and supply chains is still assessed to be limited. Most domestic oil and gas import vessels passing through the Red Sea adjacent to Israel have secured alternative routes, so there is no disruption in domestic oil and gas imports. Regarding exports, the proportion of exports to the Middle East accounts for about 3% of South Korea's total exports (based on January to September this year), and the shipment and delivery of our goods are proceeding without any issues. For some petrochemical products highly dependent on Israel and other Middle Eastern countries, alternative imports from other countries are possible, so the Ministry of Trade, Industry and Energy expects the impact on domestic supply chains to be limited.
However, depending on future developments, escalation or difficulties in passing through the Strait of Hormuz may occur. Accordingly, since the outbreak of the Middle East situation in April, the ministry plans to maintain an emergency contact system through the comprehensive situation room and sector-specific emergency response teams for energy, trade, and supply chains, and immediately activate a daily inspection system to ensure thorough real-time monitoring and response.
On that day, Choi Nam-ho, the 2nd Vice Minister of the Ministry of Trade, Industry and Energy, urged the meeting participants, "Since the situation in the Middle East could worsen beyond the current state, keep all possibilities open, thoroughly prepare for potential crisis situations, and maintain a rapid response system."
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