Korea Weighs Oil Price Cap Extension Amid $3.7 Billion Refinery Losses

The recent US-Iran conflict has put pressure on South Korea to extend its oil price cap due to significant refinery losses, according to KED Global. The country's refineries have incurred losses of $3.7 billion so far this year. Bank of Korea Governor Shin Hyun-song sent a strong signal to markets with back-to-back rate hikes, calling for a stronger won.

In the midst of these economic challenges, the central bank raised interest rates for the second consecutive meeting on August 27, 2026. Governor Shin emphasized that this decision was aimed at reducing inflation and stabilizing the currency.