Blue House Launches All-Out Effort: "Even One More Barrel, One More Ton"

Intensive Crude Oil Procurement and Price Stabilization
Daily Monitoring of Supply and Prices for 70 to 80 Items with the "Signal Light System"
Kang Hoon-sik Visits Kazakhstan, Oman, and Saudi Arabia on April 7
Kim Yong-beom: "Price Increas

8:00 AM. On the table at the Blue House Emergency Economic Situation Room, presided over by Chief of Staff Kang Hoon-sik, are thick reports submitted by each ministry’s working-level response teams since the night before. This is the “real-time traffic light system,” providing an at-a-glance overview of the supply and price trends for 70 to 80 items, including paint, pay-as-you-throw garbage bags, diesel exhaust fluid, concrete, IV solutions, and syringes. Blue means no issues, yellow signals a possible price increase within two to three months, orange indicates warning signs detected within a month, and red is used for items where actual price pressure has materialized. When orange turns to yellow, or yellow to blue, meeting participants reportedly breathe a sigh of relief.

Yonhap News

Serving concurrently as head of the Blue House Emergency Economic Situation Room, Chief Kang explained this response system during a press briefing with Policy Chief Kim Yong-bum the previous day (April 7), stating, “We are working with the urgency of changing even a single color, pouring our hearts into minimizing confusion and damage for the public.” He added, “Although there will likely be economic risk factors for a long time, since major indicators are not bad, we will keep things under control.”

According to the Blue House, the essence of the current crisis lies not in macroeconomic indicators but in the economic shocks that may spread over time. For now, exports and consumption remain solid. March exports reached a record-high of 86.1 billion dollars, and the uptrend has continued into April. Consumption is also steady, based on credit card spending, according to the Blue House. However, Chief Kang stated, “Although macroeconomic indicators are showing strong performance, the emergency situation has already persisted for over a month, and it is clear that this is a crisis of unknown duration.” The Blue House believes that the longer the war drags on, the more likely it is that shocks to the prices of crude oil, raw materials, maritime logistics, and daily necessities will spill over into people’s daily lives.

Accordingly, as Special Presidential Envoy for Strategic Economic Cooperation, Chief Kang, along with the Ministry of Trade, Industry and Energy and private sector companies, hurriedly departed the previous evening for Kazakhstan, Oman, and Saudi Arabia. He described this trip as “preparation for long-term supply,” saying, “Even if it is just one more barrel of crude oil or a single ton of naphtha, we must secure it.” While last month's agreement with the United Arab Emirates (UAE) to receive a preferential supply of 24 million barrels of crude oil was a short-term solution, this special envoy mission is focused on securing mid- to long-term supply lines in anticipation of a prolonged war. In fact, Korea depends on the Strait of Hormuz for 61% of its crude oil and 54% of its naphtha imports. The government has secured 1.1 billion barrels of alternative crude oil from 17 countries, enough for four to five months, but refinery operations and naphtha supply have already dropped by 10–20% since the war began.

Right now, the prices of raw materials like crude oil and naphtha are not the main concern. Policy Chief Kim Yong-bum, who shares responsibilities with Chief Kang and also serves as deputy head of the Emergency Economic Situation Room, stated, “A certain level of price increase is inevitable,” but emphasized, “At this moment, securing volumes is the most urgent task.” If naphtha supply becomes unstable, a chain reaction will affect IV solutions, syringes, plastic resins, and daily necessities several months down the line. This is why Policy Chief Kim insists that even if prices have already risen, priority must be placed on securing volumes. The government’s decision to include budget support for naphtha prices in the upcoming supplementary budget, as well as to consider policy finance and tax deferrals, is in this same context. Chief Kang also said, “The prices of crude oil and naphtha themselves have risen and are likely to remain high for some time,” adding, “Crude oil and naphtha price increases are unavoidable.” However, the Blue House’s plan is for the government to shoulder part of the burden borne by suppliers, so that the impact is not passed on to consumers all at once.

Given the unpredictable nature of the Middle East war and its aftermath, the Blue House intends to manage fiscal policy with the “three months direct impact, six months indirect impact” approach. There are simply too many variables depending on the course of the war, navigation in the Strait of Hormuz, international cooperation, and the attitudes of oil-producing nations. Policy Chief Kim stated, “We drafted this supplementary budget of 26.2 trillion won assuming three months of direct impact and six months of indirect impact.” This is not an optimistic view that the situation will end within six months, but rather a realistic assessment of the government’s ability to responsibly build an effective defense line. The first three months are meant for securing crude oil and naphtha and stabilizing prices and supplies of essential items, while the following six months are for absorbing the aftereffects as they spread to industry, prices, and consumption.

Yonhap News Agency

Additionally, regarding the issue of 26 Korean-flagged ships waiting at the Strait of Hormuz, the Blue House plans to prioritize international cooperation frameworks and devise measures to ensure their safe passage. With over 2,000 vessels entangled inside the Strait of Hormuz, the Blue House believes that simply drawing comparisons to other countries is neither factually accurate nor diplomatically helpful. This means the Blue House views the issue not merely as a matter of individual ship responses, but as one concerning sustainable international order and maritime safety.

Therefore, the Blue House is drawing a line against linking humanitarian aid with passage through the strait or pursuing one-on-one transactional solutions with Iran. There are concerns that the Korean ship issue could be used in a counterproductive manner in the conflict between the United States and Iran. A senior Blue House official stressed, “What is important now is not to hastily seek ways to extract our ships, but to operate within the framework of international cooperation while securing as much crude oil and naphtha as possible and buying time to prevent the shock from spilling over into domestic prices and people’s livelihoods.”

This content was produced with the assistance of AI translation services.