[Anchor]
As the conflict between the United States and Iran shows signs of escalation, international oil prices, which had fallen to the $70 per barrel range, are surging once again. With domestic fuel prices also halting their downward trend, the likelihood of maintaining the oil price cap system for the time being has increased.
Reporter Park Jaehyeon has the story.
[Reporter]
International oil prices have spiked again following the declaration of a maritime blockade by the Houthi rebels, an ally of Iran.
Brent crude, which had fallen to $71 per barrel after the signing of a previous memorandum of understanding, has surged to $89.
The Bab el-Mandeb Strait has served as an alternative shipping route, accounting for approximately 7% of global crude oil transport since the blockade of the Strait of Hormuz. Concerns are growing that this route, too, may be blocked.
The government expects that there will be no major issues with crude oil supply for the time being.
It stated that it has secured more than 110% of the previous year's average for July and August, and has also secured over 90% of the crude oil scheduled for import in September compared to the previous year.
However, with forecasts emerging that international oil prices could exceed $100 per barrel again, the shock from price hikes appears difficult to avoid.
[Interview] Kim Tae-hwan / Head of Oil Policy Research Division, Korea Energy Economics Institute: "Because we have already diversified (to sources such as North and South American crude oil), we believe that short-term disruptions in domestic crude oil supply may not occur. However, because global inventory levels are low, it will also affect prices..."
Domestic fuel prices are also being affected.
Since the oil price cap was lowered by 150 won on June 27, the price of gasoline at gas stations in Seoul, which had been consistently falling, has stopped its downward trend.
[Interview] Song Jae-jin / Yangcheon-gu, Seoul: "You have to consider that it costs 150,000 to 160,000 won more (per month than before the war). Usually, when I fill up, I drive around with some ease, but now that fuel prices are high, the very idea of going somewhere is a burden..."
As oil prices jump again, the government, which had been seeking an exit strategy such as ending the oil price cap system, has shifted its direction toward maintaining it.
President Lee Jae-myung ordered a review of measures to strengthen the oil price cap system during a Cabinet meeting.
[Voice] President Lee Jae-myung: "According to the original plan, we should have lowered it further or abolished it by now, but it seems we need to strengthen it instead."
The government is scheduled to announce the eighth oil price cap on July 24.
Reported by Park Jin-ho | Video by Oh Young-taek | Graphics by Park Cheon-woong and Choi Ha-neul | Produced by SBS Digital News
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