South Korea urges nationwide energy saving and plans a USD 16.6 billion extra budget as Iran war disrupts oil supplies through the Strait of Hormuz.
SEOUL: President Lee Jae Myung has called for a nationwide energy-saving campaign due to severe risks to oil and gas supplies from the Iran war. He stated public institutions would cut back on passenger car use immediately.
Energy Minister Kim Sung-whan told a Cabinet meeting that private-sector vehicle curbs were voluntary for now. He added these measures could be reviewed if the national energy alert level is increased.
The government will ask the top 50 oil-consuming businesses to reduce their usage. It will also encourage staggered commuting hours and other conservation steps.
Minister Kim said Seoul would restart five nuclear reactors by May to bolster supply. The plan also includes easing restrictions on coal plants and expanding renewable energy to reduce long-term dependence on liquefied natural gas.
South Korea plans to draft a supplementary budget of 25 trillion won (USD 16.6 billion) as soon as possible. This could include cash vouchers for consumers and financial support for companies.
“Right now, what matters most is not saving government finances, but deploying funds swiftly and effectively where they are needed most,” Lee told the meeting. The finance ministry said it would submit the budget to parliament by the end of March.
The ongoing US-Israeli strikes on Iran and Tehran’s retaliation have severely disrupted global energy markets. This has brought tanker traffic through the critical Strait of Hormuz to a near standstill.
South Korea imports around 70% of its crude oil through the Strait of Hormuz. The country faces a looming energy crisis despite holding about 190 million barrels in strategic and private reserves.
While International Energy Agency standards suggest reserves could last 208 days, officials note this excludes uses like petrochemical exports. This makes the actual buffer significantly shorter.
Based on a daily consumption rate of 2.9 million barrels, analysts said the reserves might not last two months. The government has secured pledges from the UAE for 24 million barrels of oil, but shipment timing remains unclear.
