Seoul: Kuwait's declaration of force majeure on crude oil shipments is expected to have a limited impact on South Korea's oil supply, as the nation has proactively addressed the potential disruption caused by the Strait of Hormuz blockade. Yang Ghi-wuk, the deputy minister for trade, industry, and resource security, assured in a regular briefing that South Korea has secured alternative crude supplies to stabilize its domestic fuel market amid the ongoing Middle East crisis.

According to Yonhap News Agency, Kuwait has begun notifying South Korean oil refineries of its decision. However, Yang indicated that the impact would be minimal since imports of Kuwaiti crude shipments had already been affected by the critical Middle Eastern oil export route's de facto closure. Force majeure, a clause that allows parties to avoid contractual obligations due to unforeseeable circumstances, has been invoked by Kuwait in this situation.

Seoul has managed to secure 70 million barrels of alternative oil supplies for May, covering about 80 percent of the country's usual monthly import level, and is working to ensure supplies for June, as stated by the industry ministry. In addressing concerns over the fuel price cap system, the deputy minister mentioned that the government would consider global price trends, potential developments in the conflict between the United States and Iran, and the impact on people's livelihoods when adjusting price ceilings later this week.

South Korea implemented the price ceiling system in mid-March to manage domestic fuel prices, which surged with the onset of the Iran war. The government has been revising the maximum prices of gasoline, diesel, and kerosene products biweekly. Some critics argue that the government is excessively controlling fuel prices, leading to increased fuel consumption despite supply disruptions, thereby straining public finances.

As of Tuesday, the average gasoline price in South Korea rose by 18.4 percent compared to February 27, the day before the Iran war began, while the average diesel price increased by 25 percent. The rate of increase was slower than in the United States but faster than in Japan, with a trend similar to major European countries, Yang noted.

Yang emphasized that the price cap system is an emergency measure, highlighting its importance as gasoline is widely used by the general population and diesel is essential for workers like cargo truck drivers and farmers.