Tensions between the US and Iran escalate, leading to soaring oil prices; concerns over rising prices in South Korea intensify

The US attack on Iran has caused international oil prices to soar, raising concerns about rising prices in South Korea. As a result, uncertainty about consumer price inflation has increased. International oil prices have surpassed $90 per barrel, affecting South Korea’s oil supply and demand, potentially leading to the highest inflation rate since the 2022 foreign exchange crisis.

When the Ukraine war broke out in 2022, prices surged sharply. At that time, ongoing sanctions on Russian oil caused international oil prices to exceed $100 per barrel, and domestic gasoline and diesel prices also rose rapidly. The increase in petroleum product prices had a significant impact on overall prices, with consumer inflation reaching record highs.

The government is implementing various measures to minimize price shocks. To reduce the rise in gasoline and diesel prices, measures such as lowering fuel taxes are being promoted, and efforts are underway to stabilize supply and demand by releasing reserve oil. President Lee Jae-myung has begun stabilizing the market through a “maximum price cap system,” and relevant agencies are conducting special inspections to prevent price monopolies in the refining industry.

If the Middle East situation persists long-term, the impact on South Korea’s economy is expected to be more severe. Especially if supply disruptions occur in the Middle East, which accounts for about 70% of South Korea’s oil imports, the problem could worsen. Experts predict that if the situation prolongs, oil prices could break through $100 per barrel, and a shortage of Middle Eastern crude oil may lead to further price increases.

If such conditions continue long-term, it could pose significant challenges to South Korea’s economy. The likelihood of further price increases is high, which would intensify the economic burden on consumers. It is crucial for the government and businesses to develop appropriate strategies to control prices.