Finance chief urges GCC nations to bolster supply chain cooperation
Finance Minister Koo Yun-cheol, center left, speaks with ambassadors of six Gulf Cooperation Council countries — the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait — at the residence of the UAE ambassador in Seoul, Friday. Courtesy of Ministry of Economy and Finance
Finance Minister Koo Yun-cheol urged Gulf Cooperation Council (GCC) countries to strengthen cooperation to help stabilize energy and raw material supply chains amid prolonged tensions in the Middle East, the finance ministry said Sunday.
Koo, who also serves as deputy prime minister, met with ambassadors from the six GCC countries in Seoul on Friday at the residence of the United Arab Emirates (UAE) ambassador to discuss economic cooperation, according to the Ministry of Economy and Finance.
The GCC comprises the UAE, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait.
Koo and GCC ambassadors expressed concern that the escalating conflict in the Middle East has heightened volatility in global oil prices and financial markets, and warned that rising tensions around the Strait of Hormuz could weigh on the global economy.
The strait is a key maritime chokepoint through which roughly 25 percent to 30 percent of the world's crude oil and about 20 percent of liquefied natural gas shipments pass.
Koo noted that Korea imports about 70 percent of its crude oil from the Middle East, with more than 95 percent of those shipments transiting the Strait of Hormuz.
"A prolonged conflict in the region could further intensify the negative effects on the Korean economy," he said.
Koo called on GCC countries to ensure stable energy supplies to Korea and maintain uninterrupted shipments of key industrial materials, including naphtha and urea. Saudi Arabia is Korea's largest crude oil supplier, while Qatar is a key provider of LNG.
In response, GCC ambassadors said Korea is a priority partner and pledged close cooperation with Seoul to ensure stable supply conditions.
Koo said the government will use all available measures to mitigate the impact of the conflict, including fuel tax cuts, price stabilization measures for petroleum products, and broader financing support for affected businesses.
The government also plans to promptly carry out a supplementary budget worth 26 trillion won ($17 billion) to help minimize the economic fallout.