(2nd LD) S. Korea ready to cope with potential fallout from Mideast crisis

All News 19:37 January 06, 2020

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SEOUL, Jan. 6 (Yonhap) -- South Korea is fully prepared to deal with any fallout from the escalating tensions in the Middle East following last week's killing by a U.S. drone of a top Iranian general, the country's finance ministry said Monday.

Finance Minister Hong Nam-ki presided over a closed-door meeting with top economic and financial officials to assess the possible impact of the tensions on the South Korean economy, the ministry said.

During the meeting, the officials vowed to closely monitor the situation around the clock and roll out countermeasures, if necessary.

The government will consider releasing its oil inventories in case the country faces disruptions in securing crude from the Middle East.

As of end-November, the amount of the government's oil reserves came to 96.5 million barrels. When considering the savings from the private sector, the amount is estimated at 200 million barrels.

Officials said the geopolitical row has led global investors to seek safer assets, and global oil prices have risen to some extent amid the U.S.-Iran tensions.

(2nd LD) S. Korea ready to cope with potential fallout from Mideast crisis - 1

During the meeting, the participants said South Korea is not facing an immediate interruption of its imports of resources, but the country still need to closely monitor the situations, considering its heavy dependency on the Middle East for energy.

The Middle East accounted for 70 percent of South Korea's imports of crude over the January-November period of 2019. That of liquefied natural gas (LNG) was estimated at 38 percent.

Military tensions have been sharply rising since last week's killing of Gen. Qassem Soleimani, arguably Iran's most powerful commander, by a U.S. air strike.

Global oil prices have soared, raising concerns that a much-awaited recovery in exports may be further delayed.

With the Middle East tensions knocking investor sentiment, South Korean stocks dropped and the won currency weakened on Monday.

The stock market's main KOSPI index dived 0.98 percent to close at 2,155.07 on Monday.

Seoul said it will continue to closely watch its financial and foreign exchange markets, as well as ongoing overseas construction projects.

The country will also contact South Korean ships in the Strait of Hormuz every hour, which is shortened from the previous interval of six hours, to ensure their safety.

South Korea plans to hold meetings of related ministries to remain vigilant over the geopolitical dispute.