S. Korean manufacturing faced with increased cost burdens as Iran crisis persists: KIET | Yonhap News Agency

## Summary
When international crude prices rise 10 percent, the average production cost of manufacturers here goes up by 0.71 percent, the Korea Institute for Industrial Economics & Trade (KIET), a state-run think tank, said in a report assessing the impact of the Iran crisis on the Korean economy. Dubai crude prices, the benchmark for Middle Eastern oil, surged by over 40 percent since U.S. and Israeli airstrikes against Iran late last month, the KIET said, noting that South Korea, in particular, is vulnerable to such a situation as the country imports around 70 percent of crude oil from the Middle East. In case of exports, the Middle East accounts for only around 2-3 percent of Korea's overall outbound shipments, but the KIET said Seoul's exports will be exposed to various indirect impacts, such as a rise in shipping costs, supply chain disruptions and a possible global economic slowdown. "Oil prices have a heavy impact on consumer prices," said Hong Sung-wook, a senior researcher at KIET, stressing that market price stabilization policies will be needed in both the short and long term. Korea seeks Saudi's cooperation for steady oil supply in foreign ministers' call (2nd LD) Seoul shares down for 2nd day on prolonged Hormuz shutdown; won declines (LEAD) Gov't to take steps to implement fuel price cap this week as Mideast crisis intensifies Keywords #Iran crisis #manufacturing impact Articles with issue keywords Most Liked (News Focus) USFK's relocation of military assets to Middle East raises concerns about Seoul's capability to deter N.K. threats 16th Gwangju Biennale: You must change your life BTS expands Gwanghwamun concert capacity to 22,000 with added standing zones BTS to launch 'Arirang' pop-ups to mark new album release Police vow zero tolerance for terror threats against BTS comeback concert Most Saved 16th Gwangju Biennale: You must change your life (2nd LD) N.

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By Kim Na-young
SEJONG, March 16 (Yonhap) -- South Korea's manufacturing sector is expected to face significantly increased cost burdens as the Middle Eastern crisis continues to push up global energy prices, a report showed Monday.
When international crude prices rise 10 percent, the average production cost of manufacturers here goes up by 0.71 percent, the Korea Institute for Industrial Economics & Trade (KIET), a state-run think tank, said in a report assessing the impact of the Iran crisis on the Korean economy.
In particular, the average production cost in the petrochemical industry will likely jump 6.3 percent, while that of chemical products are projected to increase 1.59 percent. Production costs of rubber and plastic products are expected to expand 0.46 percent.
Dubai crude prices, the benchmark for Middle Eastern oil, surged by over 40 percent since U.S. and Israeli airstrikes against Iran late last month, the KIET said, noting that South Korea, in particular, is vulnerable to such a situation as the country imports around 70 percent of crude oil from the Middle East.
In case of exports, the Middle East accounts for only around 2-3 percent of Korea's overall outbound shipments, but the KIET said Seoul's exports will be exposed to various indirect impacts, such as a rise in shipping costs, supply chain disruptions and a possible global economic slowdown.
"Oil prices have a heavy impact on consumer prices," said Hong Sung-wook, a senior researcher at KIET, stressing that market price stabilization policies will be needed in both the short and long term.
As part of such efforts, the government introduced a fuel price cap system last week, setting maximum prices for fuel products supplied by oil refineries to gas stations.
The price of Western Texas Intermediate (WTI) is seen on an electronic signboard at a Hana Bank dealing room in Seoul on March 10, 2026. (Yonhap)
nyway@yna.co.kr
(END)
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S. Korean manufacturing faced with increased cost burdens as Iran crisis persists: KIET

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## Expert Analysis

### Merits
N/A

### Areas for Consideration
- Korea seeks Saudi's cooperation for steady oil supply in foreign ministers' call (2nd LD) Seoul shares down for 2nd day on prolonged Hormuz shutdown; won declines (LEAD) Gov't to take steps to implement fuel price cap this week as Mideast crisis intensifies Keywords #Iran crisis #manufacturing impact Articles with issue keywords Most Liked (News Focus) USFK's relocation of military assets to Middle East raises concerns about Seoul's capability to deter N.K. threats 16th Gwangju Biennale: You must change your life BTS expands Gwanghwamun concert capacity to 22,000 with added standing zones BTS to launch 'Arirang' pop-ups to mark new album release Police vow zero tolerance for terror threats against BTS comeback concert Most Saved 16th Gwangju Biennale: You must change your life (2nd LD) N.

### Implications
- When international crude prices rise 10 percent, the average production cost of manufacturers here goes up by 0.71 percent, the Korea Institute for Industrial Economics & Trade (KIET), a state-run think tank, said in a report assessing the impact of the Iran crisis on the Korean economy.
- In particular, the average production cost in the petrochemical industry will likely jump 6.3 percent, while that of chemical products are projected to increase 1.59 percent.
- In case of exports, the Middle East accounts for only around 2-3 percent of Korea's overall outbound shipments, but the KIET said Seoul's exports will be exposed to various indirect impacts, such as a rise in shipping costs, supply chain disruptions and a possible global economic slowdown. "Oil prices have a heavy impact on consumer prices," said Hong Sung-wook, a senior researcher at KIET, stressing that market price stabilization policies will be needed in both the short and long term.
- The price of Western Texas Intermediate (WTI) is seen on an electronic signboard at a Hana Bank dealing room in Seoul on March 10, 2026. (Yonhap) nyway@yna.co.kr (END) Related Articles (LEAD) Korean currency slips past 1,500 won per dollar for 1st time in 17 yrs amid Middle East crisis S.

### Expert Commentary
This article covers korea, crisis, percent topics. Areas of concern are also raised. Readability: Flesch-Kincaid grade 0.0. Word count: 573.