Korea Mobilizes $14.5B to Support Exporters Amid Middle East Crisis

The government is activating economic stabilization measures, including financial support for small and medium-sized exporters, to respond to rising international oil prices and increased market volatility caused by Middle East instability.

Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol said at an emergency cabinet meeting presided over by President Lee Jae-myung at Cheong Wa Dae on the 5th, "As we cannot rule out the possibility of a prolonged Middle East situation, we are strengthening inspections across the real economy, energy, and financial markets, and have activated a joint response system among relevant agencies."

The government has particularly focused its policy response on supporting small and medium-sized exporters, who may face direct impacts from Middle East developments. Deputy Prime Minister Koo emphasized, "We have prepared policy financing totaling 20.3 trillion won to ease corporate burdens through interest rate cuts and expanded lending," adding, "We will actively pursue policy financing and tax administration support to address difficulties faced by small and medium-sized exporters."

For affected companies, the government also plans to pursue tax administration support including extensions of corporate tax payment deadlines and reduced tax audit burdens. It also plans to enhance exporters' access to financing through expanded guaranteed trade.

Response measures for logistics instability in the Middle East region will also be strengthened. In preparation for a prolonged closure of the Strait of Hormuz, the government has activated an emergency response system for import and export logistics and is reviewing an expansion of logistics voucher support limits. Previously, the domestic shipping cost support limit was raised from 30 million won to 60 million won, and the government is considering granting additional limits to Middle East-affected companies if the situation worsens.

Responses to energy supply instability will proceed in parallel. The government is pursuing additional volume procurement from regions outside the Middle East and imports from overseas production, while reviewing emergency response manuals including joint stockpiling and exercise of priority purchase rights. It plans to consider releasing strategic petroleum reserves if necessary.

Supply chain management for major raw materials with high Middle East dependency, such as naphtha, will also be pursued. The government plans to utilize the supply chain stabilization fund to expand support for procurement and emergency operating funds. Deputy Prime Minister Koo explained, "For items with high Middle East dependency, we have activated emergency response teams and are conducting item-by-item inspections."

The government has been monitoring the economic situation by activating a cross-ministerial response system immediately after the Middle East situation emerged. Led by the Ministry of Economy and Finance, the Ministry of Trade, Industry and Energy, the Ministry of Climate, Energy and Environment, the Ministry of Land, Infrastructure and Transport, the Ministry of Oceans and Fisheries, the Ministry of SMEs and Startups, the Financial Services Commission, and the Bank of Korea are participating to continuously monitor the real economy, energy, and financial market conditions.

A damage response task force is being operated, centered on small and medium-sized venture companies. Through export support centers nationwide and online channels, the government is receiving damage cases and has designated dedicated managers for each company to monitor difficulties. As of now, 49 cases of difficulties have been received, with main cases including shipping disruptions, non-payment, and increased logistics costs.

Safety management for companies operating overseas and their workers is also a key response priority. The government has secured personal information and contact details for 186 Korean crew members in waters near the Strait of Hormuz and is preparing to supply ship provisions and provide disembarkation support if necessary. Including foreign nationals, the total number of crew members under management is approximately 640. Emergency response teams have also been activated for construction workers in the Middle East region, with plans to provide evacuation support in case of emergencies.

Deputy Prime Minister Koo said, "So far, there has been no damage to our ships or workers, but given the fluid situation, we will remain vigilant in our response."

The government plans to closely monitor Middle East developments and international oil and financial market trends, and will review additional support measures if the situation worsens. Through the joint ministerial response system, it will focus on minimizing corporate damage while monitoring energy supply and potential logistics disruptions.