Korea Times. The South Korean Ministry of Commerce, Industry and Energy has announced a three-level energy saving program that will restrict car use and air conditioning in buildings amid concerns the escalating crisis over Iran’s nuclear program will push oil prices up further.
Although oil markets seem to reacting more to the prospect of the threat of US military action against Iran, which is the world’s fourth-largest oil producer, Korea is focused more immediately on the possibility of a UN embargo on Iranian oil exports.
The oil prices will go up, if Iran is banned from oil exports. And then, compulsory measures will be inevitable. We will take countermeasures after watching the result from the UN Security Council meeting.—Minister Chung Se-kyun
Level 1 of the government's plan encourages citizens to reduce energy consumption voluntarily. Should a “grave situation” occur in the Middle East, Level 2 provisions will force reductions in air conditioning use, and order drivers to leave their vehicles at home once a week to cut oil demand.
At level 3, vehicles will only be allowed to be used every other day, and the government will take control of fuel distribution. Electricity use will be limited by region.
South Korea has no domestic oil reserves, and is the world’s seventh-largest oil consumer and fifth-largest importer of crude oil, according to the US Energy Information Administration. Oil makes up the largest share of South Korea’s total energy consumption, though its share has been declining gradually in recent years.
In 2004, the country consumed around 2.14 million barrels a day (bbl/d) of oil, down from a high of nearly 2.3 million bbl/d in 1997. Most of South Korea’s oil imports come from the Persian Gulf region, with Saudi Arabia supplying about one-third of the country’s import requirements in 2004.
On Tuesday, crude oil rose above $70 a barrel in New York for the first time since Hurricane Katrina on concern the dispute over Iran’s nuclear program may disrupt shipments.