South Korea’s finance minister Choi Sang-mok convened an urgent meeting with key officials on Sunday to assess the situation in the Middle East following Iran’s drone and missile attack on Israel. Choi received a report on the joint situation review meeting and warned that the escalating crisis could increasingly impact the South Korean economy. He also emphasized the need to examine the ministry’s “contingency plan” to respond swiftly to any urgent situation that can shock the South Korean economy.

Later in the day, President Yoon Suk-yeol also presided over an emergency meeting to discuss the impact of escalating Middle Eastern conflicts on South Korea’s economy and security. Yoon instructed officials to thoroughly prepare safety measures for South Korean residents, travelers and vessels in the region.

Why It Matters

The escalating conflict between Iran and Israel could significantly impact South Korea’s economy. South Korea imports more than 60% of its oil from the Middle East. Supply disruptions and price volatility resulting from regional instability may hinder South Korea’s economic recovery. The government’s urgent meetings highlight the need to monitor the situation closely and prepare contingency plans to mitigate potential risks.

The likelihood of the conflict escalating into a full-scale war remains uncertain. The international coalition’s efforts succeeded in limiting the scope of Iran’s attack and the Iranian government’s statement via its permanent mission to the U.N. appear to suggest that Tehran may be seeking to avoid further escalation. Nevertheless, South Korea will seek to mitigate any fallout from a direct conflict between Israel and Iran. For instance, Seoul will likely seek to further strengthen its strategic petroleum reserves for the foreseeable future.