Breathing Room for Shipping Companies Hit by 'Middle East Crisis'... Up to 2.5 Billion Won in Unsecured Support

The government will provide liquidity support to shipping companies suffering losses due to the prolonged Middle East war, including offering unsecured loans of up to 2.5 billion won per company.

The Ministry of Oceans and Fisheries and the Korea Ocean Business Corporation announced on April 28 that they would implement a liquidity support package, including the establishment of a new unsecured credit guarantee, to help Korean shipping companies overcome management difficulties caused by the prolonged Middle East conflict.

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According to the Ministry of Oceans and Fisheries, since the outbreak of the Middle East war, 26 Korean vessels have been stranded and unable to pass through the Strait of Hormuz. These ships are facing difficulties due to increased insurance premiums, rising fuel costs, and higher risk allowances for crew members. Furthermore, the rise in freight rates has led some shippers to cancel shipments, worsening the business environment and raising concerns about a liquidity crunch for shipping companies.

In response, the Ministry of Oceans and Fisheries and the Korea Ocean Business Corporation will newly provide unsecured credit guarantees to shipping companies affected by the Middle East war. This measure, implemented with the approval of the Minister of Oceans and Fisheries in response to urgent economic and social crises, allows shipping companies to secure short-term operating funds without collateral. The support limit is up to 2.5 billion won per shipping company, and while the guarantee period applies to short-term loans of up to one year, it can be extended for up to five years.

The emergency management stabilization fund has also been improved by allowing the Korea Ocean Business Corporation to directly purchase corporate bonds, thereby shortening the time required for support by up to three weeks. Additionally, various fees and costs will be reduced. The support limit for this fund is up to 3 billion won per shipping company, with a one-year maturity that can be extended once for another year. In addition, companies may also receive the existing emergency management stabilization fund, which provides up to 100 billion won per shipping company, if needed.

Furthermore, the repayment period for principal and interest on existing financial products with maturing dates will be extended, and the loan-to-value (LTV) ratio for ship mortgage loans will be temporarily raised from the current 60-80% to 70-90%. Through these measures, the Ministry of Oceans and Fisheries expects shipping companies to be able to secure additional liquidity by utilizing their ship assets.

The Korea Ocean Business Corporation will provide details and accept applications for the unsecured credit guarantee and other support measures through its website. The Ministry of Oceans and Fisheries has also secured a budget of 1.4 billion won in the first supplementary budget of 2026 to support additional insurance premiums for small and medium-sized shipping companies operating in the Strait of Hormuz. Applications for this support will be accepted from early May through the Korea Ocean Business Corporation.

Minister of Oceans and Fisheries Hwang Jongwoo stated, "The government will provide all-around support to ensure that our shipping companies facing difficulties due to the Middle East war do not suffer from a lack of funds," adding, "We will do our utmost to maintain logistics networks for imports and exports and to ensure the national economy remains stable."

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