Gov't to mobilize state supply chain fund for firms with difficulties amid Iran crisis

The prices of gasoline and diesel are displayed at a gas station in Seoul, Monday, following the Iran war. Yonhap

The government will mobilize a state supply chain stabilization fund to support companies experiencing difficulties from global oil price volatility amid an ongoing geopolitical crisis in the Middle East, the finance ministry said Wednesday.

The Ministry of Economy and Finance held a meeting with authorities from related ministries to assess the impact of U.S. and Israeli attacks against Iran on Korea's supply chains and discuss a response strategy.

In the meeting, authorities pledged to extend financial support to companies importing crude oil through the supply chain stabilization fund, while expanding support for companies importing petroleum from regions other than the Middle East, such as North and Latin Americas.

For companies facing difficulties due to volatility in international energy prices, the government plans to offer emergency support, it added.

According to the ministry, no disruptions in Korea's energy supplies have yet been reported despite escalating tensions around the Strait of Hormuz, a major oil export route.

Korea has oil reserves sufficient to last 208 days and is capable of securing alternative supplies of most industrial materials, parts and equipment, it explained.

In the case of naphtha, however, the government will devise measures to limit exports, as the country could potentially face supply disruptions if the conflict prolongs. Korea ships over half of naphtha imports through the Hormuz strait, according to the ministry.

"Amid uncertainties in the Middle East, we will closely work with relevant ministries to monitor the supply and demand of key items to ensure stability in supply chains, and provide necessary support to help companies secure alternative supplies," a ministry official said.