SEOUL, April 09 (AJP) -South Korean President Lee Jae Myung admitted Thursday that the escalating Middle East conflict will deliver near-term economic damage while forcing a longer-term overhaul of the country’s industrial and energy structure.
Speaking at the first plenary session of the National Economic Advisory Council at Cheong Wa Dae, Lee said the crisis is unfolding on two fronts — an immediate energy supply disruption and a broader erosion of industrial competitiveness.
“In the short term, the Middle East war is exerting considerable pressure on our economy,” Lee said. “In the long run, the time has come for a fundamental transformation of South Korea’s economic system.”
The remarks came as uncertainty deepens around the Strait of Hormuz, a critical artery for global oil flows, with supply conditions remaining unstable despite a temporary ceasefire announcement by Donald Trump. Reports of renewed disruptions have underscored the fragility of any near-term normalization.
Lee said the nature of the current crisis differs from past oil shocks, noting that infrastructure damage across parts of the region could prolong disruptions for years rather than months. He also pointed to unresolved nuclear tensions and the risk of unilateral military action as factors sustaining volatility.
“Crises are inevitable in life and society,” he said. “Even today, there are reports of attacks despite a ceasefire. It is difficult to predict when this situation will be resolved.”
The meeting — Lee’s first full session as chair since taking office — brought together around 50 participants, including Vice Chair Kim Sung-sik, Deputy Prime Minister Koo Yun-cheol and other senior officials and civilian advisors. Discussions focused on immediate response measures and longer-term structural reforms to strengthen economic resilience.
Lee urged a coordinated policy response across time horizons, stressing that the current “window” created by the ceasefire should be treated as a critical opportunity to secure energy supplies.
“If we prepare well, we can turn this crisis into an opportunity to build a new system for renewed growth,” he said.
Policy discussions outlined a broad package of measures centered on energy security, industrial adaptation and market stabilization.
In the near term, officials emphasized the need to maximize crude procurement during any reopening of Hormuz, including immediate deployment of tankers, while maintaining price controls such as fuel caps to stabilize domestic markets.
Authorities are also considering adjustments to nuclear power plant maintenance schedules to maximize winter electricity generation. To cushion households, proposals included targeted fiscal support for energy costs, expanded supplementary budget allocations for small businesses, and even temporary public transport subsidies modeled on overseas cases.
Over the medium to long term, the focus shifts to restructuring supply chains and reducing reliance on Middle Eastern crude. Options under review include diversifying import routes via Southeast Asia and Australia, enhancing refinery flexibility, and expanding overseas resource development into higher value-added partnerships.
Park Won-joo, head of the macroeconomy team at the council, called for a more aggressive push into overseas resource development to secure alternative, lower-risk energy routes that bypass Middle East chokepoints.
The discussions also highlighted the need for stronger policy coordination under a centralized presidential control tower, alongside more transparent and predictable regulatory frameworks to support private investment.
Lee framed the crisis as a potential inflection point, drawing parallels to how Japan’s export restrictions helped catalyze South Korea’s materials and components sector. “The crisis can become a turning point,” he said, “to reorganize our energy supply chain and move toward a more proactive economic structure.”
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