Mar 16, 2026
South Korea will increase nuclear production and remove restrictions on coal due to the crisis in Iran.
South Korea's ruling Democratic Party announced on Monday that the government will remove caps on coal-fired power generation and increase the utilization of nuclear power plants to as much as 80%. This decision is part of the country's energy strategy in response to the ongoing crisis in the Middle East. Representatives from the party's economic response task force indicated during a briefing that these measures aim to stabilize energy supplies and prices due to disruptions in oil and gas shipments to South Korea caused by tensions in the Strait of Hormuz.
The country is heavily dependent on energy imports, acquiring approximately 70% of its oil and 20% of its liquefied natural gas (LNG) from the Middle East, according to data from the Korea International Trade Association. To manage LNG supplies more effectively, the government plans to ramp up coal and nuclear energy production while decreasing reliance on LNG-fired power generation, as stated by Democratic Party lawmaker Ahn Do-geol. He mentioned that the current cap on coal power output, set at 80% of installed capacity, will be lifted starting Monday, and maintenance at six nuclear reactors will be expedited to increase nuclear output from the high-60% range to 80%.
On Friday, South Korea implemented a gasoline price cap at 1,724 won ($1.15) per liter, with plans to adjust these rates every two weeks based on fluctuations in global oil prices. Ahn reported that since the introduction of the price cap, gasoline and diesel prices had decreased by 58 won and 77 won per liter, respectively, as of Sunday.
A supplementary budget will be created by the end of this month and presented to parliament, according to Ahn. This additional budget is anticipated to include compensation for refiners connected to the fuel price cap, energy voucher distributions, logistical support for exporters, and increased investment in renewable energy. Democratic Party leader Jung Chung-rae stated that they would expedite the passage of the supplementary budget proposal within 10 days of its submission. The Budget Ministry noted that while a specific date for this supplementary budget has not been set, preparations are underway.
The ruling party and government are also contemplating designating the Yeosu petrochemical complex as a special industrial crisis response zone, Ahn mentioned. He highlighted severe shortages of raw materials such as aluminum, sulfur, and naphtha, warning that supply disruptions and price increases—particularly for naphtha, of which 25% is imported from the Middle East—could compel petrochemical firms to reduce production. In response, the government plans to freeze domestic naphtha exports at last year’s levels and explore alternative import sources. The task force also agreed to double the limit on export vouchers for international transport costs to 60 million won and to introduce emergency logistics support vouchers for exporters to the Middle East, with plans to allocate 10 million won each to 1,000 companies.
The country is heavily dependent on energy imports, acquiring approximately 70% of its oil and 20% of its liquefied natural gas (LNG) from the Middle East, according to data from the Korea International Trade Association. To manage LNG supplies more effectively, the government plans to ramp up coal and nuclear energy production while decreasing reliance on LNG-fired power generation, as stated by Democratic Party lawmaker Ahn Do-geol. He mentioned that the current cap on coal power output, set at 80% of installed capacity, will be lifted starting Monday, and maintenance at six nuclear reactors will be expedited to increase nuclear output from the high-60% range to 80%.
On Friday, South Korea implemented a gasoline price cap at 1,724 won ($1.15) per liter, with plans to adjust these rates every two weeks based on fluctuations in global oil prices. Ahn reported that since the introduction of the price cap, gasoline and diesel prices had decreased by 58 won and 77 won per liter, respectively, as of Sunday.
A supplementary budget will be created by the end of this month and presented to parliament, according to Ahn. This additional budget is anticipated to include compensation for refiners connected to the fuel price cap, energy voucher distributions, logistical support for exporters, and increased investment in renewable energy. Democratic Party leader Jung Chung-rae stated that they would expedite the passage of the supplementary budget proposal within 10 days of its submission. The Budget Ministry noted that while a specific date for this supplementary budget has not been set, preparations are underway.
The ruling party and government are also contemplating designating the Yeosu petrochemical complex as a special industrial crisis response zone, Ahn mentioned. He highlighted severe shortages of raw materials such as aluminum, sulfur, and naphtha, warning that supply disruptions and price increases—particularly for naphtha, of which 25% is imported from the Middle East—could compel petrochemical firms to reduce production. In response, the government plans to freeze domestic naphtha exports at last year’s levels and explore alternative import sources. The task force also agreed to double the limit on export vouchers for international transport costs to 60 million won and to introduce emergency logistics support vouchers for exporters to the Middle East, with plans to allocate 10 million won each to 1,000 companies.