South Korea Activates Emergency Response Team Amid Middle East Tensions

The South Korean government is activating a joint emergency response team across relevant agencies to prepare for a prolonged crisis as military tensions escalate in the Middle East following U.S. and Israeli airstrikes on Iran. Authorities plan to closely monitor potential volatility in domestic stock and foreign exchange markets and implement stabilization measures as needed.

"Considering our domestic oil reserves, we have assessed that we have sufficient capacity to respond to a supply crisis," First Vice Minister of Economy and Finance Lee Hyung-il said at a briefing following an emergency inter-ministerial meeting on the Middle East situation held at the Government Complex Seoul on the afternoon of the 2nd. "However, given the high likelihood that military tensions in the Middle East will persist, we have decided to operate a joint emergency response team across relevant agencies."

The emergency response team, which has been operational since the 1st, comprises divisions for international energy, economic supply chains, and financial markets. The government noted that while international oil prices rose due to expanded risk premiums, the rate of increase has moderated compared to immediately after markets opened. Officials also assessed that the impact on stock and bond markets remains relatively limited.

"West Texas Intermediate opened at $75 and Brent crude at $81.6, but prices gradually declined during trading, with WTI at $72.5 and Brent at $79.4 as of 5:45 p.m., showing reduced gains," Lee said. "In international financial markets, Asian currencies weakened amid expanded preference for safe-haven assets, while stock prices showed mixed results."

Asian equity markets showed divergent trends as of 5 p.m., with Japan's Nikkei declining while Australia remained flat and China's Shanghai index rose. U.S. Treasury yields increased by 2 basis points, while Japanese government bond yields fell by 3 basis points.

The government plans to conduct additional monitoring of U.S. and European market movements on the evening of the 1st before holding a joint inter-ministerial inspection meeting prior to the opening of domestic markets on the 2nd.

"It is normal for financial markets to experience expanded volatility when external shocks occur," Lee said. "As it is difficult to predict whether this situation will be prolonged, we will continue daily monitoring and take situation-specific measures as necessary."