South Korea warns of economic emergency amid energy shock

Speaking at a Cabinet meeting, Lee said Seoul could invoke an emergency economic decree if conditions worsen, according to Yonhap News Agency. Such a mechanism would allow the government to implement urgent policies without prior parliamentary approval, a step typically reserved for major crises.

Energy dependence raises concerns

Lee highlighted South Korea’s heavy reliance on external energy sources, noting that roughly 55% of its imports originate from the Middle East. He called for intensified monitoring and comprehensive contingency planning, urging ministries to take “preemptive, bold action” to mitigate potential disruptions.

The warning comes as instability around the Strait of Hormuz continues to threaten oil and gas shipments, a critical concern for import-dependent economies like South Korea.

Critical materials under watch

The president also instructed authorities to closely manage key industrial inputs, including urea solution, helium and aluminum, stressing that stockpiles should be maintained at levels comparable to wartime readiness. The directive reflects broader fears of supply chain shocks linked to prolonged geopolitical tensions.

Lee reiterated the need to accelerate the transition toward renewable energy, framing it as a strategic priority to reduce vulnerability to external shocks.

Government unveils support package

In response to rising fuel costs, the government proposed a supplementary budget worth 26.2 trillion won (approximately $17.1 billion). The package is aimed at stabilising the economy and easing pressure on households, with cash assistance expected to reach around 70% of the population.

Global impact of Middle East tensions

The economic strain follows escalating hostilities involving the United States, Israel and Iran, which have disrupted regional energy infrastructure and trade routes. The resulting volatility has driven up global prices and heightened concerns over long-term supply security.