Oil prices that jumped to new highs have intensified concerns for Korean industries and the outlook of a tepid economy.

Crude oil may have traded at a near-record close on Monday after the death of Saudi Arabia`s King Fahd, but oil dealers expect oil prices to continue rising in the interim on concerns of tight supply.

Dubai crude, which accounts for 80 percent of Korea`s oil imports, touched $54.98 a barrel on Tuesday. Experts believe the days of $55 a barrel is not too far away.

In an economy plagued by a slow pace of recovery because of cooling exports and continual weak domestic consumption, high oil prices mean more challenges and strife for industries, particularly for the manufacturing sector that demand a lot of energy. Higher raw material costs will cut into profits.

Economists warn that the paper, textiles, chemicals, steel and shipping industries, as well as airlines, would deal the greatest blow from skyrocketing oil prices.

Brent crude in London climbed to $60.57 a barrel, while New York`s main contract rose by $0.43 to $61.92 a barrel.

High oil prices push up raw materials and distribution costs, and pressure export-oriented businesses to raise the prices of their goods.

The Korean government said it will implement measures to sustain the vitality of exports to keep the economy afloat. Some plans include holding trade promotion meetings aimed at alleviating problems faced by companies at their export destinations.

To help small and midsize companies, the Korea Trade-Investment Promotion Agency this year will establish a team to provide advice and consultations to businesses facing difficulties.

The country will try to expand exports of its cultural services sector, moving away from being too product-oriented.

Oil prices have been rising due to worries of a global supply crunch and political instability in member countries of the Organization of the Petroleum Exporting Countries, such as Iran and Nigeria. OPEC accounts for about 40 percent of the world`s oil production.

(sohjung@heraldm.com)



By Yoo Soh-jung