Dubai Crude Surpasses $60 Mark

The unstable Middle Eastern political situation, such as the victory of Hamas, an Islamic military resistance group in Palestine, has sent international oil prices skyrocketing.

Last year, Korea imported 80 percent of its oil from the region, which means crude oil supply and demand of Korea could be disrupted as the geopolitical situation in the Middle East worsens.

The Ministry of Commerce, Industry, and Energy (MOCIE) and the Korea National Oil Corporation said Monday that the spot price of Middle Eastern Dubai crude, Korea’s main import, closed at $60.08 per barrel on January 27, up $0.71 (1.2 percent) from the previous day.

The U.S. Western Texas Intermediate crude spot price climbed $1.38 (2.1 percent) from the precious day to $67.74 per barrel, while the Brent crude spot price was traded at $64.72, up $1.59 (2.5 percent) from the day before.

Meanwhile, Korea imported a total of 689.36 million barrels of crude from the Middle East last year, which was a 6.8 percent increase from 2004. This is 82 percent of the total crude imports of 840.32 million barrels. This is the first time in 24 years since 1981 (90.7 percent) that more than 80 percent of Korea’s crude imports have come from the Middle East.

Lee Won-gul, vice minister of MOCIE, said, “If crude exports were to be suspended, causing a shocking impact on the Korean economy, the government could consider employing measures such as energy conservation policies.”

legman@donga.com