South Korean companies are strategizing to address the surge in international oil prices amidst ongoing unrest in the Middle East. Major firms like Samsung Electronics Co., SK Group, Hyundai Motor, and Hanwha Group have convened emergency meetings to mitigate the effects of the crisis on their operations. The airline and shipping sectors, heavily influenced by fuel costs, are exploring risk-hedging strategies to navigate the situation.
Korean Air Co., a prominent airline, disclosed hedging up to 50% of its anticipated annual fuel consumption to adapt to fluctuating oil prices. Similarly, HMM Co., Korea’s largest shipping company, announced plans to implement fuel surcharges in response. Other companies are also evaluating measures to counter escalating raw material prices and currency fluctuations, anticipating potential global economic slowdown and stagflation in the Korean economy.
A recent report by Hyundai Research Institute indicated that if average oil prices remain around $100 per barrel this year, South Korea’s economic growth rate for 2026 could decrease by 0.3 percentage points. Brent crude oil prices, the global benchmark, surged to $107.54 per barrel, marking a 14.85% increase from the previous day and surpassing the $100 threshold.
To stabilize domestic fuel prices, Industry Minister Kim Jung-kwan urged major oil refiners to refrain from unjustified price hikes. Kim emphasized the importance of transparent and equitable petroleum pricing to prevent consumers from bearing excessive burdens due to the Middle East situation. Notably, the minister cautioned against exploiting the surge in global oil prices at the expense of people’s welfare.
In Seoul, the average gasoline price exceeded 1,900 won (US$1.28) per liter for the first time in nearly four years, reaching 1,947.4 won by 9 a.m., as reported by the Korea National Oil Corp. The Korea Oil Station Association attributed the recent fuel price surge to supply price increments by oil refineries, amidst public discontent.
In response to the energy market’s volatility stemming from Middle East turmoil, the government issued a preemptive alert on a potential resources crisis. Efforts are underway to secure additional oil supplies from non-Middle Eastern regions and develop contingency plans for potential oil reserve releases.
