Seoul: The government issued Thursday a precautionary alert over a possible energy supply disruption amid an ongoing geopolitical crisis in the Middle East, the industry ministry said, vowing a stern response to unfair market practices involving energy supply and prices.
According to Yonhap News Agency, the government issued the Level 1, or blue, alert in the country's four-tier national resource security warning system to respond preemptively to a possible disruption in Korea's energy supply due to the Iran crisis, as stated by the Ministry of Trade, Industry and Resources.
The ministry said the country will raise its readiness against a potential prolonging of the Middle East conflict. Officials noted that although South Korea has yet to experience any disruptions in energy supplies and maintains sufficient short-term supply capacity, the alert was issued to preemptively respond to a potential resource crisis and minimize any potential damage to people's livelihoods and domestic companies.
South Korea currently possesses oil reserves sufficient to last 208 days and is capable of securing alternative supplies of most industrial materials, parts, and equipment, according to the government. Since the U.S. and Israel initiated their attacks against Iran over the weekend, international oil prices have jumped more than 10 percent, with the de facto closure of the Strait of Hormuz, a major oil export route, raising further concerns over energy market volatility.
In response, the government has been working to secure additional oil and gas supplies from regions other than the Middle East, while preparing for the release of oil reserves. It also vowed a stern response to unfair market practices, such as illicit oil distribution, hoarding and profiteering, collusion, and price gouging, which can exacerbate energy price volatility.
The industry ministry announced an intensive crackdown on such practices starting Friday and asked local oil refineries and gas station operators to refrain from excessively hiking prices. "Since it is difficult to predict when the (Middle Eastern) conflict will end, the government will maintain full readiness and monitor the situation very seriously," Industry Minister Kim Jung-kwan said in a press release, vowing a "timely" response to any energy supply disruptions.
In a separate government meeting on the energy supply response, Finance Minister Koo Yun-cheol stated that the government will use all possible measures, such as setting a price cap on petroleum, to deal with a possible market disruption. "Currently, petroleum supply is stable in Korea, with the country holding sufficient oil reserves that significantly exceed internationally recommended levels," Koo said. He also criticized businesses attempting to exploit the crisis by excessively raising prices, labeling such acts as "shameless behavior."