Rising global oil prices amid threats to block the Red Sea put pressure on the Korean economy

As tensions between the United States and Iran rise again, international oil prices are climbing. On top of that, Yemen's Houthi rebels have threatened to block the Bab elMandeb Strait, the entrance to the Red Sea, further raising concerns about disruptions to Middle Eastern oil transport. This situation could also affect the Red Sea route, which had been bypassing the Strait of Hormuz, and may place a burden on the Korean economy as well. This is because South Korea relies heavily on Middle Eastern crude oil, so rising oil prices could put pressure on both inflation and the exchange rate at the same time. The Bank of Korea is maintaining its growth and inflation forecasts for this year, but said that if oil transport disruptions continue for a prolonged period, the possibility of higher inflation and slower growth could increase. The government has begun responding by saying it will secure a stable supply of crude oil and naphtha.