Middle East conflict pushes up oil prices, South Korea considers implementing a cap on oil prices for the first time in 30 years.

Due to concerns over the rise in energy prices provoked by the escalating Middle East conflict, the South Korean government is considering implementing an oil price cap for the first time in nearly 30 years. According to reports by Yonhap News Agency on Sunday, following the US strike on Iran, the global crude oil prices soared almost immediately, which was reflected in the domestic fuel prices in South Korea without the usual two-week lag. This has prompted South Korean officials to start reviewing the possibility of implementing an oil price cap. South Korea relies heavily on energy imports and is particularly sensitive to external price shocks, which often lead to inflation. The review is based on Article 23 of South Korea's Petroleum and Alternative Fuels Business Law, which allows the Minister of Industry to designate the highest selling price in the event of drastic oil price fluctuations threatening economic stability. However, since South Korea deregulated oil prices in 1997, this provision has been effectively dormant. South Korean President directs the development of a pricing cap scheme Sources have stated that the government is cautiously weighing this option due to potential side effects, including market distortions and financial burdens. During a special cabinet meeting discussing the US strike on Iran, South Korean President Moon Jae-in instructed officials on Thursday that if implementing a nationwide unified cap proves difficult, regional and fuel type-specific price cap systems should be promptly established. The following day, Moon also warned refiners against possible collusion in raising gasoline prices. As domestic fuel prices in South Korea soar, with average gasoline prices exceeding $1.27 per liter In line with the President's instructions, the South Korean government has set up an interdepartmental task force to combat illegal petroleum distribution, hoarding, and unfair trade practices. Additionally, the government has decided to procure over 6 million barrels of crude oil from the United Arab Emirates to stabilize energy supply. Despite these measures, gasoline prices at domestic gas stations in South Korea continue to rise. According to data from the Korea National Oil Corporation, as of Saturday evening, the average gasoline price surpassed 1890.87 South Korean won per liter ($1.27). This article was reprinted from the "Wall Street Journal" app, written by Long Yue, GMTEight edited by Song Zhiying.