Source: Business Korea
It is expected that the South Korean economy will be able to benefit from OPEC member countries’ recent decision to reduce the production of petroleum.
Those who have this view point out that the decision will result in a rise in oil prices with South Korea’s exports getting back on the track these days and this, in turn, will cause an increase in demand in emerging markets such as China and Russia to give more business opportunities to South Korean manufacturers and exporters in the semiconductor, automobile, machinery, petrochemical, computer and steel industries in particular. Still, the Donald Trump administrations’ trade protectionism and the ongoing global economic recessions can have a negative effect on the recovery of exports.
“Low oil prices have limited demands in the emerging markets for a while,” said Che Hee-bong, director of the Office of International Trade & Investment at the Ministry of Trade, Industry & Energy, adding, “However, an increase in oil price is likely to lead to an increase in product price and more exports to China, Russia and so on. ”
“The likelihood of higher oil prices is on the rise and South Korea’s exports are likely to be positively affected,” Hyundai Research Institute research analyst Hong Jun-pyo explained, continuing to say, “Once oil producing countries’ fiscal conditions get better, more contracts can be anticipated in the neighboring states and sovereign wealth funds’ overseas investment can increase at the same time, which can contribute to a recovery of the global economy.”