Muristek
Seven out of 10 South Korean companies predict they will swing to an operating loss if global oil prices soar to $150 a barrel, a survey showed on Sunday.Among the 151 Korean manufacturers polled by the Federation of Korean Industries (FKI), a business lobby group, 70.1% said they will likely turn to the red at the crude oil price of $150 a barrel, or above.Even 13% of the respondents are already suffering from operating losses at the current oil price of slightly over $100.The survey was conducted on the companies with annual sales of 100 billion won ($82 million) or more between March 7 and 15, shortly after the global benchmark Brent hit a 14-year peak near $140 a barrel.The average oil price at which they expect to swing to an operating loss is $142. All the respondents to the survey, titled 'The impact of surging global oil prices on Korean companies,' said they may consider stopping production at their plants if crude oil prices surpass $200. A majority of them, or 76.2%, saw a smaller-than-expected operating profit this year due to the surge in oil prices, while planning to scale back facility investments.They forecast a 5.2% drop in 2021 operating profit on average compared to their initial projections, with a 2.7% cut in planned investment spending.More than eighty percent of those surveyed, or 84.6%, forecast the upward run in global oil prices will last less than six months.FKI called for the government to lower the 3% tariff levied on imported crude oil to alleviate the financial burden on companies.Last week, a veteran commodities trader Doug King told Bloomberg that Brent oil will likely hit $150 a barrel this year due to the supply shock from the war in Ukraine and resilient demand from travelers.By Kyung-Min Kangkkm1026@hankyung.comYeonhee Kim edited this article
Most Read