International oil prices are soaring! South Korea plans to restart a nationwide "vehicle driving ban" to counter the energy crisis

Impacted by the escalation of the U.S. and Iran conflict, Middle East energy supplies have been disrupted, and international oil prices continue to rise. The South Korean government is drafting a plan: if oil prices further reach between $120 and $130 per barrel, it will expand the current “license plate driving restrictions” energy-saving policy, which is limited to the public sector, to the general public nationwide. This marks the first time since the 1991 Gulf War that South Korea has considered implementing nationwide vehicle restriction measures to comprehensively control domestic energy demand.

South Korea’s vehicle restrictions may be expanded to the general public

Currently, WTI crude oil futures are approximately $101, and Brent crude oil futures are approximately $105. Reports indicate that if oil prices surge further to $120–$130, the South Korean government may extend restrictions on private vehicle use from public agencies to private citizens. The government stated that if the situation in the Middle East worsens, the national resource security crisis alert will be raised to the second-highest level, “Warning.” At that point, measures to curb consumption will be necessary, and the government will also consider further reductions in fuel taxes to ease the burden on the public.

(When will the Strait of Hormuz return to normal? Corporate scenario planning warns oil prices could rise to $175.)

To prevent energy shocks, South Korea has established an emergency economic response team

South Korea relies heavily on energy imports from the Middle East—up to 70% of its crude oil and 20% of its liquefied natural gas come from the region. Since the outbreak of hostilities at the end of February and Iran’s effective blockade of the Strait of Hormuz, which controls one-fifth of global energy transportation, the global energy market has been highly volatile, reigniting inflation pressures. In response to the crisis, President Lee Jae-myung ordered the activation of an emergency response system. Prime Minister Kim Min-seok immediately announced the formation of a cross-ministerial “Emergency Economic Response Team,” which holds bi-weekly meetings to monitor the impact of the conflict on energy, the overall economy, financial markets, and people’s livelihoods. The presidential office also established an emergency economic status room to prepare for the worst-case scenario.

Implementing fuel price freezes and energy transition measures, relaxing restrictions on coal and nuclear power

Faced with the first energy price surge in nearly three decades, the South Korean government has introduced fuel price caps for the first time. Simultaneously, South Korea is fully adjusting its energy structure—lifting the maximum 80% operation limit for coal-fired power plants and increasing nuclear power plant utilization from about 70% to over 80%. JPMorgan economist Park Seok-ki pointed out that this crisis highlights the vulnerability of South Korea’s energy infrastructure, urging the government to accelerate the expansion of nuclear and renewable energy deployment to prepare for potential future supply chain disruptions.

Businesses respond with energy-saving measures; President Lee Jae-myung worries the crisis “keeps him awake at night”

Currently, the South Korean government has implemented a five-day license plate last-digit odd-even driving restriction for public sector vehicles and has called on citizens to shorten shower times and charge mobile devices during the day to conserve energy. Major corporations such as Samsung Electronics and SK Group have responded to the government’s call, encouraging employees to reduce driving and adopt energy-saving practices; several politicians have shared photos on social media of using public transportation and riding bicycles as role models. President Lee Jae-myung hopes the country will accelerate the shift to renewable energy, such as electric vehicles, and stated that the energy crisis is “so severe that I can’t even sleep.”

(PHILIPPINES declares a “national energy emergency”: fuel reserves will last only 45 more days)

This article, “Global oil prices surge! South Korea plans to restart ‘nationwide vehicle restrictions’ to combat the energy crisis,” first appeared on Chain News ABMedia.