Unprecedented Energy Supply Shock from the Middle Eastโฆ
โUrgent Structural Reforms Needed in Power and Transport Beyond Short-Term Measuresโ
Energy Transition Forum Hosts Emergency Forum on Renewable Transition
- IEA analysis: Current oil supply shock comparable to the combined scale of the 1st and 2nd oil crisesโฆ LNG shock twice that of the Ukraine crisis
- Co-Chair Yoon Soonjin: โEnergy transition is a matter of survivalโฆ We must move beyond temporary fixes to systemic transformationโ
- Former Chair Kim Han-young: โShift freight from roads to railโฆ Abolish fuel subsidies to ensure fair competitionโ
- Expert Kwang-hoon Seok: โAvoid price controls on electricity and gasโฆ Restore demand management through pricingโ
- Expert panel: โMaximize energy efficiency, secure ESS flexibility, and encourage rational consumption through citizen participationโ
The Energy Transition Forum (Co-Chair: Soonjin Yoon) successfully held an Emergency Forum on Responding to the Middle East Energy Crisis: Demand Management and Renewable Energy Transition on Friday, April 3, at 3:00 PM at the Press Center (19th Floor) in Seoul.
The forum was organized to assess the global oil and gas supply disruptions triggered by prolonged Middle East conflictsโincluding the potential closure of the Strait of Hormuzโand to explore effective policy reforms in the power and transport sectors to address Koreaโs structural vulnerability stemming from its heavy dependence on fossil fuels.
โSevere Oil and LNG Supply Crisisโฆ Structural Reform Needed Beyond Short-Term Responsesโ
In her opening remarks, Co-Chair Soonjin Yoon stated,
โRecent geopolitical instability in the Middle East once again demonstrates how vulnerable import-dependent energy systems are,โ adding that โenergy price volatility and supply uncertainty will continue to place a burden on the overall economy.โ
She emphasized, โRather than relying on temporary measures, we must fundamentally transform the systemโreducing energy demand and transitioning toward a renewable energy-based structure.โ
According to the Forum, the scale of the current crisis is unprecedented. Based on analysis by the International Energy Agency (IEA), the oil supply shock resulting from a potential closure of the Strait of Hormuz is comparable to the combined impact of the 1973 and 1979 oil crises. Meanwhile, the global LNG supply shock is estimated to be twice that of the Ukraine crisis (approximately 87 million tons).
The Forum noted that โKorea, which is heavily dependent on energy imports, is facing a comprehensive crisis across oil, gas, and electricity supply,โ and stressed that โgiven the potential for prolonged impacts over the next 4โ5 years, fundamental structural changesโcentered on demand management and renewable energyโare urgently required.โ
Power Sector: โAvoid Price Controls and Restore Demand Management Through Pricingโ
Kwang-hoon Seok, Research Fellow at the Energy Transition Forum, presented on โReform Tasks for the Power Sector Amid Prolonged Middle East Crisis.โ
He pointed out that politically driven price controls on electricity and gas have weakened demand management functions and significantly increased the debt burden of public energy companies.
He proposed thatย โelectricity and gas prices should be normalized to encourage reduced consumption, while providing targeted support for vulnerable groups,โ and suggested several policy measures, including:
Introduction of EV V2G (Vehicle-to-Grid) tariff systems similar to the UKโs Octopus Energy model
- Expansion of high-efficiency technologies such as heat pumps by phasing out residential gas subsidies
- Rapid deployment of solar energy within the shortest possible timeframe
Transport Sector: โFrom Roads to Railโฆ Urgent Need for Fair Competitionโ
Kim Han-young, former Chair of the Korea National Railway, presented on โModal Shift Policies for Reducing Oil Consumption and Achieving Carbon Neutrality.โ
He highlighted the current transport structure, where road transport accounts for over 84% of oil consumption (passenger vehicles 55.7%, freight trucks 28.5%), and called for a strong shift toward rail freight, which offers significantly higher energy efficiency.
He emphasized that โroad-biased subsidies, such as fuel subsidies for freight vehicles (KRW 890 billion in 2024) and highway toll discounts, distort market principles and hinder carbon neutrality.โ
He proposed abolishing fuel subsidies and reallocating them toward:
- Support credits for small businesses
- Rail transition subsidies (approximately KRW 1 trillion scale)
He also stressed the urgent need to establish piggyback rail logistics companies capable of handling diverse logistics demands, including parcel delivery and cold-chain transport.
Expert Panel: โTransition to a Low-Energy Society Through Flexibility and Citizen Participationโ
Following the presentations, a panel discussion and open forum were held, moderated by Co-Chair Soonjin Yoon.
Jungseok Seo (Adjunct Professor, Hanyang University) emphasized that for countries like Korea, โthe ability to maintain the same level of production with less energy must become a core competitive advantage,โ proposing short-term efficiency measures and financial models for buildings and industrial complexes (e.g., SEU, PennSEF).
Changmin Park (Vice President, Gridwiz) stated that โfuture power system competitiveness depends not on generation volume but on flexibility,โ calling for large-scale deployment of ESS (Energy Storage Systems) and smart EV charging technologies utilizing electric vehicles as mobile storage.
Dongju Kim (Secretary General, Citizensโ Coalition for Energy) proposed reinstating public awareness budgets for rational energy consumption, emphasizing tailored, region- and time-specific guidance and the need to shift toward a low-energy consumption society.
Byung-hwa Han (Director, Eugene Investment & Securities) stressed that โKoreaโs most urgent issue is securing energy independence through renewable energy sources that do not rely on imported fossil fuels,โ calling for immediate government action, including:
- 10 GW of new solar and wind capacity within one year
- Fast-tracking grid expansion
- Large-scale deployment of BESS (Battery Energy Storage Systems)
Additionally, Geunyul Yang (Visiting Research Fellow, Korea Railroad Economics Institute) participated, contributing perspectives on logistics transport policies.
[Event Overview]
- Title: Emergency Forum on Responding to the Middle East Energy Crisis: Demand Management and Renewable Energy Transition
- Date & Time: April 3, 2026 (Fri), 15:00โ17:00
- Venue: Press Center Press Conference Hall (19th Floor), Seoul
- Host: Energy Transition Forum
[Contact]
Jina Park, Research Fellow
๐ +82-10-7244-1717
ย gina@energytransitionkorea.org
Unprecedented Energy Supply Shock from the Middle Eastโฆ
โUrgent Structural Reforms Needed in Power and Transport Beyond Short-Term Measuresโ
Energy Transition Forum Hosts Emergency Forum on Renewable Transition
The Energy Transition Forum (Co-Chair: Soonjin Yoon) successfully held an Emergency Forum on Responding to the Middle East Energy Crisis: Demand Management and Renewable Energy Transition on Friday, April 3, at 3:00 PM at the Press Center (19th Floor) in Seoul.
The forum was organized to assess the global oil and gas supply disruptions triggered by prolonged Middle East conflictsโincluding the potential closure of the Strait of Hormuzโand to explore effective policy reforms in the power and transport sectors to address Koreaโs structural vulnerability stemming from its heavy dependence on fossil fuels.
โSevere Oil and LNG Supply Crisisโฆ Structural Reform Needed Beyond Short-Term Responsesโ
In her opening remarks, Co-Chair Soonjin Yoon stated,
โRecent geopolitical instability in the Middle East once again demonstrates how vulnerable import-dependent energy systems are,โ adding that โenergy price volatility and supply uncertainty will continue to place a burden on the overall economy.โ
She emphasized, โRather than relying on temporary measures, we must fundamentally transform the systemโreducing energy demand and transitioning toward a renewable energy-based structure.โ
According to the Forum, the scale of the current crisis is unprecedented. Based on analysis by the International Energy Agency (IEA), the oil supply shock resulting from a potential closure of the Strait of Hormuz is comparable to the combined impact of the 1973 and 1979 oil crises. Meanwhile, the global LNG supply shock is estimated to be twice that of the Ukraine crisis (approximately 87 million tons).
The Forum noted that โKorea, which is heavily dependent on energy imports, is facing a comprehensive crisis across oil, gas, and electricity supply,โ and stressed that โgiven the potential for prolonged impacts over the next 4โ5 years, fundamental structural changesโcentered on demand management and renewable energyโare urgently required.โ
Power Sector: โAvoid Price Controls and Restore Demand Management Through Pricingโ
Kwang-hoon Seok, Research Fellow at the Energy Transition Forum, presented on โReform Tasks for the Power Sector Amid Prolonged Middle East Crisis.โ
He pointed out that politically driven price controls on electricity and gas have weakened demand management functions and significantly increased the debt burden of public energy companies.
He proposed thatย โelectricity and gas prices should be normalized to encourage reduced consumption, while providing targeted support for vulnerable groups,โ and suggested several policy measures, including:
Introduction of EV V2G (Vehicle-to-Grid) tariff systems similar to the UKโs Octopus Energy model
Transport Sector: โFrom Roads to Railโฆ Urgent Need for Fair Competitionโ
Kim Han-young, former Chair of the Korea National Railway, presented on โModal Shift Policies for Reducing Oil Consumption and Achieving Carbon Neutrality.โ
He highlighted the current transport structure, where road transport accounts for over 84% of oil consumption (passenger vehicles 55.7%, freight trucks 28.5%), and called for a strong shift toward rail freight, which offers significantly higher energy efficiency.
He emphasized that โroad-biased subsidies, such as fuel subsidies for freight vehicles (KRW 890 billion in 2024) and highway toll discounts, distort market principles and hinder carbon neutrality.โ
He proposed abolishing fuel subsidies and reallocating them toward:
He also stressed the urgent need to establish piggyback rail logistics companies capable of handling diverse logistics demands, including parcel delivery and cold-chain transport.
Expert Panel: โTransition to a Low-Energy Society Through Flexibility and Citizen Participationโ
Following the presentations, a panel discussion and open forum were held, moderated by Co-Chair Soonjin Yoon.
Jungseok Seo (Adjunct Professor, Hanyang University) emphasized that for countries like Korea, โthe ability to maintain the same level of production with less energy must become a core competitive advantage,โ proposing short-term efficiency measures and financial models for buildings and industrial complexes (e.g., SEU, PennSEF).
Changmin Park (Vice President, Gridwiz) stated that โfuture power system competitiveness depends not on generation volume but on flexibility,โ calling for large-scale deployment of ESS (Energy Storage Systems) and smart EV charging technologies utilizing electric vehicles as mobile storage.
Dongju Kim (Secretary General, Citizensโ Coalition for Energy) proposed reinstating public awareness budgets for rational energy consumption, emphasizing tailored, region- and time-specific guidance and the need to shift toward a low-energy consumption society.
Byung-hwa Han (Director, Eugene Investment & Securities) stressed that โKoreaโs most urgent issue is securing energy independence through renewable energy sources that do not rely on imported fossil fuels,โ calling for immediate government action, including:
Additionally, Geunyul Yang (Visiting Research Fellow, Korea Railroad Economics Institute) participated, contributing perspectives on logistics transport policies.
[Event Overview]
[Contact]
Jina Park, Research Fellow
๐ +82-10-7244-1717
ย gina@energytransitionkorea.org