Energy crisis persists, South Korean government switches to "emergency mode"

This article is reprinted from [Xinhua Net];

Xinhua News Agency, Beijing, March 26 - The South Korean government entered “emergency mode” on the 25th to address the potential long-term energy crisis that could be triggered by the situation in the Middle East. The Blue House and the Prime Minister’s Office will each form an emergency team to coordinate and implement related measures.

South Korean Prime Minister Kim Boo-kyum held a press conference at the Central Government Building in Seoul on the same day to announce the decision. He stated that to prepare for the “worst-case scenario” of a prolonged tense situation in the Middle East, the South Korean government should adopt a preventive response system. To this end, the Blue House will establish a new agency called the “Emergency Economic Situation Office” to determine policy direction; the Prime Minister’s Office will set up an “Emergency Economic Headquarters” to lead interdepartmental efforts.

These two new agencies will be formed after President Yoon Suk-yeol issues relevant instructions. On the 24th, Yoon Suk-yeol chaired a State Council meeting and urged the government to activate the emergency mechanism in advance to address crises that might affect people’s livelihoods and the economy. He also instructed various departments to conduct a comprehensive inspection of supplies that may be obstructed in the supply chain and explore alternative import channels.

A Blue House official stated at a press conference later on the 25th that the “Emergency Economic Situation Office” will be headed by the head of the Presidential Secretary’s Office, with the head of the National Security Office and the head of the Blue House Policy Office serving as deputies. This agency will have five sub-groups responsible for macroeconomics, energy, finance, livelihoods, and overseas affairs. The Blue House will hold daily economic monitoring meetings and plans to hold at least one press conference each week to provide updates.

The Chief Secretary for Political Affairs at the Blue House, Hong Ik-pyo, said, “At this stage, it is difficult to assess how the situation in the Middle East will develop. Considering that the related impact may last for 3 to 6 months, the government is preparing response measures for various scenarios.” According to him, restoring normal energy supply may take about four months.

According to South Korean media reports, the newly established “Emergency Economic Headquarters” in the Prime Minister’s Office will be led by Kim Boo-kyum and will have five sub-groups, each headed by the Vice Prime Minister for Economy, the Minister of Trade, Industry and Energy, the Chairman of the Financial Services Commission, the Minister of Health and Welfare, and the Minister of Foreign Affairs.

Kim Boo-kyum also urged the public to actively respond to the government’s energy-saving measures, such as driving less and using public transportation more. He expressed hope that the public would trust the government’s response system and focus on normal economic activities to overcome difficulties together.

South Korea is highly dependent on energy imports. According to data from the Korea International Trade Association, about 70% of the country’s oil and about 20% of liquefied natural gas come from the Middle East. After the U.S. and Israel launched military strikes against Iran at the end of February, shipping through the Strait of Hormuz has been persistently obstructed, placing pressure on South Korea’s energy supply.

On the 18th, the South Korean government raised the country’s resource security crisis warning level from the lowest “attention” level among four levels to “caution.” According to relevant South Korean regulations, once the resource security crisis warning is raised to “caution,” the government will strengthen oil supply and demand control measures, exercise priority purchasing rights over jointly held international oil reserves, and seek alternative energy supply routes that do not go through the Strait of Hormuz.

The Ministry of Trade, Industry and Energy of South Korea launched the “Supply Chain Stability Support Center” on the 23rd, selecting 30 to 40 categories closely related to people’s livelihoods and industrial production for monitoring. If supply chain issues are detected, countermeasures will be taken at the government level, and the monitoring scope will be expanded based on actual circumstances. (Zhang Jing)