Gasoline prices rise, Kospi sinks as Middle East tensions worsen

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Gasoline prices rise, Kospi sinks as Middle East tensions worsen

Published: 21 Apr. 2024, 16:29 Updated: 21 Apr. 2024, 17:00

SHIN HA-NEE
[email protected]

Gasoline prices are shown at a gas station in Seoul on Sunday. [YONHAP]

Korea’s gas prices surged and the stock market tumbled amid heightened geopolitical tensions in the Middle East.

According to Opinet's weekly data, gasoline was sold at 1,695.1 won ($1.23) per liter on average in Korea from April 14 to 18, up 21.8 won from the previous week. This is the fourth consecutive week that the gasoline price has risen.

On Sunday, the gasoline price stood at 1,706.47 won as of 5 p.m. Gasoline prices breached the 1,700-won mark for the first time this year on Thursday.

The diesel price rose 11.1 won to 1,562.4 won per liter during the same period, marking a third consecutive week of increases.

The steep rise in local oil and gas prices is driven by worsening geopolitical uncertainties in the Middle East, with global crude prices rising as the armed conflict between Iran and Israel escalates. The fluctuation in crude prices is reflected in domestic gas prices, typically with a delay of around two weeks.

In the latest development in the Israel-Iran conflict that began earlier this month, media outlets reported on Friday that Israel conducted a retaliatory attack on a target in Iran.

The domestic stock market took a hit as well.

The benchmark Kospi plummeted by more than 3 percent during mid-trading on Friday before closing at 2,591.86, down 1.63 percent from the previous trading day.

The Kosdaq also fell 1.61 percent to 841.91.

The won, which had rebounded since the won-dollar exchange rate hit a 17-month low on Tuesday, plunged again on Friday following the latest development in the Iran-Israel conflict. The won-dollar exchange rate closed at 1,382.20 won that day, compared to 1,372.50 won a day before.

Minister Choi Sang-mok of the Ministry of Economy and Finance chaired an emergency meeting on Friday to monitor the possible implications of the Iran-Israel conflict on the Korean economy.

The confrontation has yet to directly disrupt supply chains, according to the ministry. However, the ministry vowed to closely monitor the situation through an emergency response team.

The Ministry of Trade, Industry and Energy also held an emergency meeting that day, chaired by Minister Ahn Duk-geun, to assess the situation regarding the energy supply and trade environment.

“To prevent the external uncertainties from affecting the domestic economy, [the ministry] will further bolster its monitoring effort and remain vigilant on the current situation regarding the energy supply and price fluctuations, as well as the industrial supply chain and trade,” said Ahn.

BY SHIN HA-NEE [[email protected]]