South Korea steps in to help local businesses facing Mideast export risks

South Korea is ready to provide comprehensive support to small and medium-sized enterprises (SMEs) facing difficulties exporting to countries in the Middle East, says the Ministry of Trade, Industry and Resources.

According to government officials, the decision is linked to the unstable geopolitical situation and the blockage of the Strait of Hormuz, Caliber.Az informs, citing South Korean media.

The government has pledged to swiftly address logistics and supply chain disruptions, expand liquidity support measures, and increase the export voucher program in cooperation with the Ministry of SMEs and the Financial Services Commission.

Although the Middle East accounts for only about 3% of South Korea’s exports, a 72.3% increase in transportation costs on these routes over the past week, along with a surge in global oil prices, is placing additional pressure on exporters.

Major countries exporting to the Middle East include China, the United States, India, and Germany, which supply machinery, electronics, and vehicles.

South Korea primarily imports energy resources from the Middle East, including crude oil, petroleum gas, and petrochemical products, which account for over 80% of its oil and 50% of its gas supply. Key suppliers are Saudi Arabia, the UAE, and Kuwait.

By Khagan Isayev