SEOUL: South Korea may widen restrictions on driving to include the general public if oil prices breach US$120 a barrel as it seeks to cushion the impact of the Iran war on its energy supplies, the country’s finance minister said.
"We are reviewing whether to extend the system to the private sector to encourage public cooperation, but we hope the war ends soon so that such measures won’t be necessary,” Finance Minister Koo Yun Cheol told broadcaster KBS on Sunday (March 29).
South Korea has already imposed driving restrictions on civil servants, curbing how often they can access government buildings by car based on the last number of their licence plates.
Expanding restrictions to the private sector would be the first such move since the 1991 Gulf War. It would also signal heightened concern over a looming energy shock for an economy that is a key player in global tech supply chains.
President Lee Jae Myung last week called on the public to pare back power usage and ride public transport rather than driving cars to avoid energy shortages as the Iran conflict drags on.
South Korea, a major importer of crude and exporter of fuels into Asia and beyond, is seeing increasing risks of inflation heating up and the Iran conflict weighing on growth for a nation dependent on Middle Eastern energy imports.
The nation’s export growth maintained momentum in early March thanks to resilient demand. But a surge in global crude oil prices is raising raw materials costs, while worsening shipping conditions and broader supply disruptions are putting pressure on trade flows.
Brent - on track for a record monthly gain - surged as much as 3.7% to $116.75 a barrel Monday morning after the Houthis fired missiles at Israel over the weekend, and said they would continue operations until attacks on Iran and its proxy militant groups cease. West Texas Intermediate jumped above $100. - Bloomberg
