Home > Business > Finance

FSC vice chair sees energy supply volatility as opportunity to diversify sources

Published: 25 Mar. 2026, 19:16 Updated: 25 Mar. 2026, 19:25

JIN MIN-JI
[email protected]

Kwon Dae-young, vice chairman of the Financial Services Commission, seventh from left, front row; Park Chang-hee, CEO of the JoongAng Ilbo and publisher of the Korea JoongAng Daily, sixth from left; Lee Ho-sung, president and CEO of Hana Bank, seventh from left, second row; Jung Jin-wan, president and CEO of Woori Bank, eighth from right, second row; at the 2026 Korea Economic Forum, organized and hosted by the Korea JoongAng Daily, at the Westin Josun Seoul in central Seoul, on March 25. [PARK SANG-MOON]

The Korean government is seeking to turn the energy disruption triggered by the Iran war into an opportunity to diversify energy imports and expand domestic alternative energy sources, said Kwon Dae-young, vice chairman of the Financial Services Commission (FSC), at the 2026 Korea Economic Forum (KEF) on Wednesday.

“The current shock differs from those in the past, beset by geopolitical tensions on top of the intense tech rivalry with once well-integrated global supply chains being fragmented,” Kwon said during the annual forum, organized and hosted by the Korea JoongAng Daily, at the Westin Josun Seoul in central Seoul.

The vice chairman made the remark in response to a question about how Korea will respond to market volatility in the wake of the geopolitical tensions, following his address on Korea’s 2026 financial policy agenda to some 170 diplomats and corporate representatives present, including Park Chang-hee, CEO of the JoongAng Ilbo and publisher of the Korea JoongAng Daily.

Some 200 diplomats and corporate representatives attend the 2026 Korea Economic Forum, organized and hosted by the Korea JoongAng Daily, at the Westin Josun Seoul in central Seoul, on March 25. [PARK SANG-MOON]

Kwon noted that the key task for Korea now is to expand and develop energy sources.

“An energy structure centered on raw materials is no longer viable,” he said, as roughly 70 percent of Korea's crude oil and half of its naphtha imports pass through the Strait of Hormuz. But the crisis will serve as an opportunity for the energy-reliant country to diversify sources of energy imports, increase reserves and expand alternative energy sources, ranging from solar and wind to nuclear power — all part of the effort to cushion such risks in the future, he added.

Kwon further noted that shocks in the real economy will not necessarily spill over into the financial sector, as the Kospi has rebounded past the 5,500 level after plunging into the low 5,000s from around 6,300 after the Iran war started in late February. “Rather, the financial sector’s resilience could help support the real economy, creating a mutually reinforcing system,” he added.

Kwon also reiterated the financial authorities’ commitment to strengthening the capital market, particularly through a two-tier structure of the tech-heavy Kosdaq aimed at improving market screening.

“Currently, a company with a market capitalization of 20 trillion won [$13.3 billion] and one worth 200 billion won are included in the same index, weakening its screening function,” Kwon explained. “Our goal is to clearly separate higher-quality companies from so-called penny stocks."

“By grouping some hundred large, mature firms, we can create an index that would serve as a benchmark for index funds,” which is expected to generate more capital inflow into Korea, he continued, while adding, “The companies in the lower tier are by no means weak, but are rather firms that are in the process of growing and stepping up.”

The two-tier system was introduced at a conference chaired by President Lee Jae Myung on March 18, where FSC Chairman Lee Eog-weon outlined a plan to divide the market into two segments — one composed of mature, innovative companies and the other of growth-stage scale-ups that can move between the two — in a bid to enhance market dynamism and competitiveness.

The Kosdaq rose 35 percent last year and an additional 22 percent this year — comparatively weaker than Kospi’s 76 percent rally last year and 31 percent climb in 2026.

Kwon also noted that Korea’s inclusion in the Morgan Stanley Capital International (MSCI) Developed Markets Index — a promotion from its current "emerging market" status — is an agenda item the current government considers important.

“The Korean government is close to completing all the requirements requested by MSCI in order to meet the conditions for inclusion,” Kwon said, in reference to the planned 24-hour foreign exchange trading in July, mandatory disclosures in English and improvements to dividend procedures. "The inclusion is expected to generate a greater inflow of higher-quality capital."

Park Chang-hee, CEO of the JoongAng Ilbo and publisher of the Korea JoongAng Daily speaks at the 2026 Korea Economic Forum held at the Westin Josun Seoul in central Seoul, on March 25. [PARK SANG-MOON]

In his opening address, the JoongAng Ilbo CEO Park stressed that clear and well-established communication between the government and key stakeholders is especially critical during periods of market uncertainty fueled by the Iran war.

"In times of such financial uncertainty, what matters is not only policy, but also how clearly the government communicates with key stakeholders, including foreign envoys such as those present here today," he said.

BY JIN MIN-JI [[email protected]]