South Korea is weighing the possibility to extend driving curbs from civil servants’ use of vehicles to the general public if oil prices hit $120 per barrel, Finance Minister Koo Yun Cheol said.
If enacted, such a measure would be the first in South Korea since 1991 during the Gulf war.
Early on Monday, oil prices were rising by over 2% with Brent Crude topping $115 per barrel amid an escalating conflict which now involves the Iran-backed Houthis in Yemen.
South Korea has already restricted access by vehicle to government buildings in a rotating system based on the last digit of the license plates.
“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,” the finance minister told broadcaster KBS on Sunday, as carried by Bloomberg.
“If the Middle East situation worsens, the crisis alert would have to move up to the ‘warning’ stage, and around that point we would need to curb consumption,” Koo added in the remarks carried by Reuters.
South Korea imports most of the crude it consumes from the Middle East and is one of the most exposed Asian importers to Qatari LNG, which is now offline.
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South Korea, Taiwan, and Singapore are most vulnerable to the loss of Qatari term LNG supply following its force majeure declaration, Vortexa’s LNG analyst Ken Lee said earlier this month.
In the wake of the 1990 Gulf War, South Korea implemented a 10-day vehicle rotation system for about two months in 1991.
The current crisis could also result in restrictions on driving for the general public, if oil prices move in the $120-$130 per barrel range, Koo said.
Meanwhile, the country is pushing back the retirement of coal-fired power generation capacity amid the oil and gas shock caused by the Middle East war.
By Michael Kern for Oilprice.com
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