Korea Industry Minister: Gasoline Could Return to ₩1,500/L If US-Iran War Fully Ends

The Quick Take

• Korea's Industry Minister Kim Jung-kwan said gasoline prices could return to pre-war levels of ₩1,500-1,600 per litre if the US-Israel-Iran war fully ends and Hormuz Strait tensions resolve
• Korea secured approximately 250 million barrels of oil supply — roughly three months of domestic consumption — during the Minister's recent Saudi Arabia visit
• Current prices have already come down significantly from peak war levels, aided by a maximum price cap the government imposed during peak Hormuz disruption

Korean Industry and Trade Minister Kim Jung-kwan stated in a KBC television interview that gasoline prices at the pre-war level of ₩1,500-1,600 per litre are achievable if the US-Israel-Iran conflict is completely resolved and Hormuz Strait tanker traffic normalizes. His comments arrive as energy markets globally are recalibrating around the prospect of ceasefire negotiations and partial de-escalation in the Middle East conflict that caused crude oil price spikes when the Hormuz Strait—through which approximately 20% of global oil trade flows—faced disruption risk. Korea, a major oil importer with no domestic oil production, is among the most exposed OECD economies to Persian Gulf supply disruptions.

Korea's government response to the oil price shock included imposing a maximum gasoline price cap during the peak disruption period and securing advance supply commitments during the Minister's Saudi Arabia visit, where approximately 250 million barrels of supply were locked in — equivalent to roughly three months of Korea's domestic consumption. The Qatar visit also yielded gas supply recovery commitments. These supply security measures demonstrate active government management of energy security risk, but they also reflect the structural vulnerability of Korea's $1.7 trillion economy to Middle East geopolitical instability. Korean refinery margins, already under pressure from prior crude price spikes, stand to recover materially if crude prices normalize.

The forward watch for investors monitoring Korea's energy and consumer sectors is the timeline and completeness of the US-Iran negotiations currently underway. A durable ceasefire that reopens Hormuz to normal tanker traffic would allow crude prices to de-escalate from war-premium levels, directly benefiting Korean refiners (SK Innovation, S-Oil) through margin recovery and Korean consumers through lower fuel costs. The macro variable for Korean equities broadly is whether geopolitical de-escalation coincides with or precedes a global economic slowdown — lower oil prices from peace are a different dynamic than lower oil from demand destruction, and Korean industrial profits respond very differently to each scenario.

Synthesized from 3 sources.