Impact of Iran Conflict: South Korea Saves Energy, India Secures Fuel Stocks
The energy crisis resulting from the escalation of war in the Middle East is beginning to hit major importing countries in Asia. South Korea’s President, Lee Jae Myung, has called for a national energy-saving campaign amid risks of oil and gas supply disruptions due to the Iran-US war.
Lee emphasised that public institutions will cut passenger vehicle usage to reduce fuel consumption.
South Korea’s Energy Minister, Kim Sung-whan, explained that restrictions on private sector vehicles remain voluntary for now, but could become mandatory if the energy alert level rises.
The Seoul government is urging the public to adopt 12 saving practices, including shortening shower times, charging phones and electric vehicles during the day, and using washing machines only on weekends.
“Currently, the most important thing is not saving government finances, but deploying funds quickly and effectively where they are most needed,” Lee said, quoted from The Star.
As a long-term measure, South Korea will reactivate five nuclear reactors in May and ease restrictions on coal-fired power plants.
This energy mix adjustment is expected to save up to 20 percent of the national average daily liquefied natural gas (LNG) consumption.
The situation was triggered by US-Israel attacks on Iran and Tehran’s retaliation that crippled tanker traffic in the Strait of Hormuz.
That route is crucial as it accounts for 70 percent of South Korea’s crude oil imports. Although it has reserves of 190 million barrels, analysts estimate those stocks may not last more than two months if daily consumption reaches 2.9 million barrels.
In other parts of Asia, Indian Prime Minister Narendra Modi has warned that the Iran conflict creates unprecedented challenges for the world’s fastest-growing major economy. Nevertheless, Modi assured that current domestic energy supplies are sufficient.
“Our government’s efforts are to ensure that supplies of petrol, diesel, and gas are not excessively disrupted, and that ordinary families in this country face as little difficulty as possible,” Modi said.
The war that broke out on 28 February has disrupted the global energy market and halted flows of crude oil and LNG. India, a major energy importer from the region, is beginning to feel the impact across various industrial sectors from ceramics factories to fertiliser producers.
Modi stressed that attacks on commercial shipping and the closure of the Strait of Hormuz are unacceptable. Currently, India is working to ensure safe transit for Indian vessels stranded in the Middle East.
Strong foreign exchange reserves and solid economic fundamentals are believed to help India cushion external shocks and global market volatility.