The South Korean government will provide additional liquidity to ease the refinancing burden on companies affected by the Middle East crisis.

South Korean financial regulators announced on Tuesday that the finance department will expand policy financing programs and ease bond refinancing burdens for companies affected by the long-term Middle Eastern crisis.

Chairman Lee Yook-won of the Financial Services Commission (FSC) made the statement during a meeting with officials from the petrochemical and refining industries. These sectors are particularly vulnerable to the impacts of global supply disruptions and rising costs caused by the Iran conflict.

The agency stated that at the end of last month, the Korean government increased the emergency financing plan from 20.3 trillion won (approximately $203k) to 24.3 trillion won, and plans to further raise it to 26.8 trillion won through additional budget allocations.

Additionally, private financial institutions, including Korea’s five major financial holding groups, are expected to provide over 53 trillion won through new financing plans.

Starting Tuesday, small and medium-sized enterprises affected by the Middle Eastern crisis will be allowed to reduce repayment ratios and decrease interest premiums when refinancing primary collateral bonds (P-CBOs) within a year.

P-CBOs are securities backed by a basket of corporate bonds.

Korea Development Bank and Export-Import Bank of Korea are discussing measures to provide liquidity support for Korea National Oil Corporation (KNOC)’s crude oil procurement to help stabilize the petrochemical and refining sectors.

The FSC stated that a corporate restructuring fund of 1 trillion won will be established this month, and investments will be made in six key industries, including petrochemicals, to support corporate restructuring and financial improvement.

During the meeting, industry insiders said that although they are urgently sourcing raw materials from the U.S., Africa, and other regions, long-term disruptions could eventually lead to shutdowns, and they called for continued financial support.