Government Strengthens Response to Middle East Risks... Fourth Day of Economy Ministry Meetings, Industry Ministry Upgrades Emergency Response Headquarters (Comprehensive)

Government Conducts Comprehensive Review, Envisions Possible Blockade of Hormuz
Reaffirms Readiness for Real Economy and Release of Oil Reserves

As the situation in the Middle East has rapidly deteriorated, the government has activated an emergency response system covering the entire spectrum of the economy, energy, and shipping. The Ministry of Economy and Finance continued its joint situation review meetings with related agencies for the fourth consecutive day, assessing the impact on the financial and real economies. Meanwhile, the Ministry of Trade, Industry and Energy and the Ministry of Oceans and Fisheries elevated their response organizations to vice-ministerial-level emergency systems, raising the intensity of their response.

On March 4, the Ministry of Economy and Finance held a joint situation review meeting (via conference call) on the Middle East situation, presided over by First Vice Minister Lee Hyungil. The meeting aimed to assess the impact of the worsening Middle East situation on the international financial markets and the domestic economy, and to share response updates with related ministries and agencies. The Ministry of Economy and Finance stated that it would closely monitor the impact of the Middle East situation on domestic financial markets and the real economy, and would continue to review necessary response measures.

At the government level, the economic response has effectively shifted to an emergency footing. The Ministry of Trade, Industry and Energy upgraded its existing "emergency response team" to the "Middle East Situation Response Headquarters," led by a vice minister, and raised the response level for the real economy as a whole.

The previous day, Kim Jeong-Kag, Minister of Trade, Industry and Energy, chaired the "3rd Real Economy Review Meeting" via video conference, conducting a comprehensive assessment of resource and energy supply, trade, supply chains, finance, and the impact on each industry. In particular, the ministry focused on reviewing its contingency plan, assuming a scenario in which the Strait of Hormuz would be effectively blocked. The ministry is monitoring the status of oil tanker passage and major shipping schedules, and explained that it is prepared to immediately implement alternatives, such as adjusting shipping schedules, should a blockade become a reality.

Kim Jeong-Kag, Minister of Trade, Industry and Energy, who is on a tour of the Philippines, is chairing the 3rd Middle East Situation Economic Review Meeting via video conference at The Manila Hotel in the Philippines on the 3rd, assessing the impact by industry sector. Ministry of Trade, Industry and Energy.

The government currently believes that the impact on oil supply and demand in the short term will be limited, as sufficient oil reserves have been secured. However, the government is closely watching developments related to oil tankers passing through the Strait of Hormuz and changes in transportation conditions such as insurance and freight rates, and is reviewing plans to secure alternative routes outside of the Middle East.

Minister Kim urged industry stakeholders to make additional efforts to secure supply from regions outside the Middle East. He also stated that if the situation is prolonged and private sector crude oil inventories fall below a certain level, the Ministry of Trade, Industry and Energy would decide on the release of reserves after a situation assessment meeting. He instructed that preparations be made so that oil stored in reserve depots can be supplied immediately if necessary.

In this regard, Korea National Oil Corporation held a "Petroleum Supply Crisis Response Task Force Meeting" the previous day to review the status of strategic oil reserves at its nine storage bases nationwide. Choi Moonkyu, Acting President of Korea National Oil Corporation, reported that, combining government and private reserves, several months' worth of oil is being held, exceeding the International Energy Agency (IEA) recommended level of 90 days' supply.

The gas supply situation is assessed to be relatively stable. Since over 80 percent of the country's LNG imports come from outside the Middle East, the government believes it can respond for a considerable period even if Qatari supplies are interrupted. The government also plans to secure alternative sources from Southeast Asia, Australia, and North America in parallel.

Kim Sungbum, Vice Minister of Oceans and Fisheries, is presiding over a situation review meeting on the Middle East sea area via video conference on the 3rd. Ministry of Oceans and Fisheries

The Ministry of Oceans and Fisheries also raised its response level. The ministry upgraded its emergency response team, which had been operating since March 1, to a vice-ministerial-level emergency response task force and began operating a 24-hour response system.

Vice Minister Kim Seongbeom of the Ministry of Oceans and Fisheries is presiding over daily situation review meetings, placing the highest priority on ensuring the safety of Korean vessels and crew. As of the morning of March 4, there are 40 Korean vessels operating in waters near the Strait of Hormuz, with 26 of them located inside the Strait itself. So far, there have been no direct damages reported to Korean vessels.

The impact on maritime logistics and supply chains is also assessed to be limited at this time. Major container shipping companies have been rerouting around the Cape of Good Hope in Africa instead of using the Suez Canal since the Red Sea crisis, so the direct impact is not considered significant. However, the government will enhance monitoring of 1,063 companies whose exports to seven Middle Eastern countries bordering the Strait of Hormuz account for over 50 percent of their sales, and will proceed with measures such as emergency export vouchers and liquidity support.

This content was produced with the assistance of AI translation services.