South Korea Requests Cooperation to Curb Crude Oil Price Increase

The finance minister of South Korea has requested more cooperation from other countries to restrain the sharp increase in crude oil prices, which can slow down the growth of the economy.

In a press release held in Seoul, the Strategy and Finance Ministry said that the minister convened with that of India, China, Canada and Mexico and the World Bank head. During the meeting, the ministers exchange opinions on the possible actions to take to handle crude oil prices.

Bahk Jae-wan is joining the 2-day assembly of a Group of 20 finance ministers in Washington.  According to the minister, derivatives of crude and several speculative funds were unnaturally influencing the present increase in oil prices.

Benchmark crude prices like Brent, West Texas Intermediate (WTI) and Brent have all increased in the past several months.

The average Dubai oil price per barrel reached $122.50 during the previous month from its last year’s average of $106. In the month of March this year, a similar increase was observed in WTI and Brent crude prices as they reached $106.30 and $124.90 respectively, compared to their respective prices of $95.10 and $111.10 in 2011.

According to the ministry, it is critical to reach an agreement on more standard oversight and controls on derivatives, and to be ready for more oil market volatility while the West increases its effort to pressure Iran in stopping its nuclear program.

Risk factors stemming from these types of events pose an economic threat to nations like South Korea as they rely on oil imports for consumer and industrial needs.

Finance ministers were also asked to support the bid of Seoul to host the Green Climate Fund headquarters, as it is deemed important in the economies of developing and industrialized countries.

In the discussions with Robert Zoellick, the president of the World Bank, Bahk emphasized the willingness of South Korea to play the role as mediator between emerging market and advanced economies in order to help settle their differences.

Korea, being the fourth biggest economy in Asia, is considered a role model for developing nations that have become a part of the world’s developed nations in the last several decades.