Prolonged Mideast conflict may negatively affect Korean exports to region: KOTRA

Missiles launched from Iran towards Israel are seen from Hebron, in the Israeli-occupied West Bank, Thursday. Reuters-Yonhap

The ongoing military conflict between Israel and Iran could negatively affect Korea's exports to the Middle East should the crisis last for an extended period, a business assessment report showed Thursday.

According to the report by the Korea Trade-Investment Promotion Agency (KOTRA), the latest Middle East crisis has already triggered concerns over oil supply disruptions, with very large crude carrier (VLCC) freight rates rising more than 20 percent amid fears that oil prices could exceed $100 per barrel.

KOTRA noted that if the conflict continues, Korea's positive export trends seen this year to Israel, Iran, Jordan, Lebanon and Syria could reverse.

According to the agency, exports to these countries had risen by as little as 10 percent and by up to 140 times from a year earlier during the January-May period.

"While these markets account for a relatively small portion of the country's total exports, extended instability could disrupt regional demand," the report noted.

KOTRA said it has launched an emergency response task force to monitor energy and logistics developments. The agency also plans to maintain close coordination with its overseas offices to support Korean exporters operating in the region.