As tensions between the United States and Iran reignite, supply chain instability in the Middle East is intensifying. However, the government reports that crude oil supply remains relatively stable.
The Ministry of Trade, Industry and Energy announced on July 21 that "crude oil supply for July and August has been secured at over 110% compared to the average of the previous year," adding that "the amount of crude oil to be imported in September is also steadily increasing, with about 90% secured compared to last year." Yang Gi-wook, head of the ministry's Resource Security Division, stated, "The amount of crude oil secured for September continues to rise."
Amid renewed clashes between the U.S. and Iran, the Houthi rebels in Yemen recently declared a maritime blockade against Saudi Arabia. This has raised concerns about potential blockages at Bab el-Mandeb, the entrance to the Red Sea, leading to a rise in international oil prices the previous day.
However, reports that Iran has received a 10-day ceasefire proposal from mediators led to a slight decline in international oil prices on the same day.
Since the signing of a memorandum of understanding (MOU) for a ceasefire between the U.S. and Iran, three of the six oil tankers that passed through the Strait of Hormuz on June 17 en route to South Korea have already arrived in the country. The remaining three tankers are expected to arrive within this week.
Meanwhile, President Lee Jae-myung addressed the issue of the oil price cap during a cabinet meeting at the Blue House on the morning of July 21, stating, "The situation in the Middle East is worsening again, and there is no clear prospect for an early ceasefire or resolution." He emphasized the need to closely monitor the impact on domestic prices.
He added, "According to the original plan, we should have lowered or abolished the price cap by now, but it seems we need to strengthen it instead." This has led to speculation about a potential increase in the price cap.
The government had previously adjusted the supply prices of gasoline, diesel, and kerosene through the seventh oil product price cap on June 26, reducing them by 150 won per liter to 1,784 won, 1,773 won, and 1,380 won, respectively. The seventh price cap is set to remain in effect for four weeks, making it likely that the eighth price cap will be determined on July 24.
* This article has been translated by AI.
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