Gov't to secure oil supplies from outside Middle East amid possible closure of Hormuz strait

First Vice Finance Minister Lee Hyoung-il, left, and Second Vice Foreign Minister Kim Jina attend a press briefing on an emergency government meeting on the response to the Iran crisis at the Government Complex Seoul, Monday. Yonhap

The government said Tuesday it will push for securing oil supplies from outside the Middle East in response to the possible closure of the Strait of Hormuz amid ongoing U.S. and Israeli strikes on Iran, while stressing that Korea has sufficient oil reserves.

The Ministry of Economy and Finance held an emergency response meeting on the Iran conflict with related ministries to assess the impact of the situation on Korea and discuss a response strategy.

The ministry said no safety issues have been reported from Korean vessels operating in the Middle East and that the country holds sufficient oil reserves under a scenario in which the crisis becomes prolonged.

But in preparation for a potential blockade of the Hormuz strait, the world's most critical oil export route, the government will work to secure additional oil supplies from regions other than the Middle East, it added.

Korea heavily relies on energy shipped through the strait, importing about 70.7 percent of oil and 20.4 percent of liquefied natural gas from the Middle East.

The ministry said the government will monitor domestic and global energy, and financial markets around the clock, and is ready to implement a market stabilization program, comprising of at least 100 trillion won ($68.4 billion) in support, if needed.

The benchmark Korea Composite Stock Price Index (KOSPI) had plummeted over five percent as of 12:05 p.m., on heightened concerns amid the Iran crisis, prompting the bourse operator to issue a sell-side circuit breaker.

International oil prices continued to show volatility, but the pace of the price hike slowed down, according to the ministry.

The government will also sternly respond to unfair market practices, including fake news operations that attempt to exploit investor sentiment, the ministry added.

Meanwhile, Vice Budget Minister Lim Ki-keun ordered ministry officials to "thoroughly" monitor the status of government budget execution related to export firms, shipping firms and overseas Korean nationals to minimize damage connected with the crisis, according to Lim's office.