South Korea Implements Price Cap on Fuel as Global Oil Prices Surge Amid Middle East Tensions

Seoul. South Korea has imposed a price cap on fuel. The decision to implement a maximum fuel price (price cap) for the first time in nearly 30 years was made on Monday after the price of crude oil in the global market exceeded $100 per barrel.

President Lee Jae-myung made this decision during an emergency meeting on Monday in reaction to the impact of the ongoing war in the Middle East spilling over into the oil market. He stated that the rapid rise in oil prices due to the ongoing conflict in the Middle East is putting significant pressure on South Korea's economy, which is dependent on energy imports.

The policy chief at the presidential office stated that South Korea's Ministry of Trade, Industry and Energy is preparing to implement the fuel price cap this week. As South Korea is a major industrial economy, a large exporter, and an important member of the G20 group, this move is being viewed as a major policy decision. 

President Lee stated, 'The maximum price system must be implemented quickly and enforced firmly to control the currently excessive rise in petroleum product prices.' The government also announced that it will strictly monitor oil refining companies and gas stations to prevent them from controlling the market by creating artificial shortages.

Furthermore, the government has been directed to ensure oil supply through alternative routes, avoiding the Strait of Hormuz. Last week, South Korea signed an agreement to receive over 6 million barrels of crude oil from the United Arab Emirates.

This is expected to help stabilize supply. International crude oil prices surpassed $100 per barrel on Sunday due to the conflict between the US-Israel and Iran. 

This marks the first time oil prices have exceeded $100 since Russia invaded Ukraine in 2022. Analysts have warned that if the tension in the Middle East persists for a long time, the price of crude oil in the global market could reach up to $200 per barrel.