South Korea to introduce fuel price cap as Middle East crisis rages

South Korean President Lee Jae Myung on Monday asked authorities to "swiftly" introduce a cap on local fuel prices and preemptive responses to cope with surging gas prices and volatility in foreign exchange markets amid a deepening Middle East crisis, local media reported.

Lee chaired an interministerial meeting to assess the latest developments amid US-Israeli strikes on Iran and Tehran's retaliatory attacks across the Middle East, which have prompted the price of Brent oil to surge through $100 per barrel, Seoul-based Yonhap News reported.

As the crisis in the Middle East deepens, uncertainty in the domestic and global economic environment is expanding significantly, placing a considerable burden on the Korean economy, which relies heavily on global trade and energy imports from the Middle East, Lee said.

Lee also called for preemptive responses with worst-case scenarios in mind to address the economic fallout from heightened tensions in the Middle East, urging financial stability measures and the exploration of alternative energy routes.

"As it is difficult to predict how the situation will unfold, the government must prepare preemptive response measures with a sense of urgency, keeping even the worst-case scenario in mind," Lee said.

He urged his administration and the Bank of Korea to prepare additional preemptive measures to respond to rising volatility in financial and foreign exchange markets, instructing authorities to expand the 100 trillion-won ($66.8 billion) market stabilization program if necessary.

Calling for measures to address uncertainty surrounding energy supplies following concerns over disruptions to shipping through the Strait of Hormuz, Lee said that Seoul will coordinate with strategic partner countries to promptly explore alternative energy routes.

Tensions in the Middle East have escalated since the United States and Israel launched a large-scale attack on Iran on Feb. 28, killing more than 1,200 people, including Iranian Supreme Leader Ali Khamenei, over 150 schoolgirls, and senior military officials.

Iran has retaliated with sweeping barrages of its own that have targeted US bases, diplomatic facilities, and military personnel across the region, as well as multiple Israeli cities. The attacks have continued to escalate.

The conflict has raised concerns about global energy supplies amid a sharp drop in maritime traffic through the Strait of Hormuz, a key route that carries about 20 million barrels of oil daily.