Finance Minister Koo Yun-cheol has called for increased cooperation among Gulf Cooperation Council (GCC) countries to stabilize energy and raw material supply chains amidst ongoing tensions in the Middle East. Koo, who is also the deputy prime minister, held discussions with ambassadors from the six GCC nations in Seoul to address economic collaboration. The GCC includes the UAE, Bahrain, Saudi Arabia, Oman, Qatar, and Kuwait.
Expressing concerns over the impact of escalating conflicts in the Middle East on global oil prices and financial markets, Koo and GCC ambassadors highlighted the potential economic repercussions of rising tensions around the vital Strait of Hormuz. This strategic waterway facilitates the transit of approximately 25-30% of the world’s crude oil and 20% of liquefied natural gas shipments.
South Korea heavily relies on the Middle East for about 70% of its crude oil imports, with over 95% of these shipments passing through the Strait of Hormuz. Koo emphasized the adverse effects a prolonged conflict in the region could have on the Korean economy. He urged GCC countries to ensure stable energy supplies to South Korea and maintain uninterrupted shipments of critical industrial materials like naphtha and urea.
In response to Koo’s call, GCC ambassadors reaffirmed South Korea’s significance as a strategic partner and committed to working closely with Seoul to guarantee stable supply conditions. The government in South Korea plans to implement various measures, including fuel tax reductions, price stabilization initiatives for petroleum products, and enhanced financial assistance to support affected businesses. Additionally, a supplementary budget of 26 trillion won ($17 billion) is set to be swiftly enacted to mitigate the economic impact of the conflict.
