SEJONG, Jan. 15 (Yonhap) -- A moderate increase in global oil prices sparked by U.S.-Iran tensions is likely to help boost South Korea's exports, a trade association said Wednesday.
A 10 percent hike in global oil prices will lead to a 3.2 percent rise in South Korea's outbound shipments, according to the Korea International Trade Association (KITA). The trade surplus, however, will narrow as its imports will increase by a slightly higher rate of 3.3 percent.
Earlier this month, the benchmark Dubai crude shot up to nearly US$70 per barrel amid growing geopolitical tensions in the Middle East. It was later stabilized after U.S. President Donald Trump said he will opt for nonmilitary retaliation such as sanctions against Iran.
Iran recently carried out a series of missile attacks against a U.S. air base in Iraq, further heightening tensions in the Middle East originally caused by the United States' killing of a top Iranian general in a drone strike.
KITA said 10 out 13 major export products will benefit from a moderate increase in global oil prices.
Major beneficiaries include petrochemical and petroleum goods, which each represent the fourth and fifth-largest export products.
Should the benchmark oil price jump beyond $80 per barrel, however, the association warned that South Korea's export recovery may be hampered as it will weigh down on business sentiment around the globe.
South Korea's outbound shipments plunged 10.3 percent on-year in 2019, with exports dipping for 13 consecutive months as of December. Seoul earlier projected its outbound shipments to rebound in 2020 by rising 3 percent on the back of a recovery in its mainstay chip segment and a base effect.
Bumpy road lies ahead for Samsung, even after heir avoids detention
One month into eased social distancing, S. Korea wrestles with cluster infections, cases with unknown routes
Virus outbreak sheds light on overlooked side of highly touted 'fast' delivery services
Moon's post-corona presidency laden with tough tasks
S. Korea shifts toward new normal of everyday quarantine but wary of 'blind spots'