Success and failure both stem from chaebols: South Korea’s 'commodity curse'

But unlike Japanese sogo shosha (general trading companies), Korean sogo shosha function differently. Japanese trading houses act more like 'organizers of the global economy', establishing themselves as independent functional platforms by taking equity stakes in mines and energy projects worldwide. In contrast, Korean sogo shosha serve as 'in-house trading departments' for their parent chaebols—primarily tasked with efficiently exporting products from group-affiliated enterprises (e.g., Samsung Electronics) to global markets. Samsung C&T, Hyundai Global Service, and LG International operate international marketing networks tightly aligned with their respective chaebol’s global production bases. Samsung C&T’s business spans steel, coal, petroleum, and other sectors. 3.2 Energy: Chaebols’ 'Cash Cow' and 'Powder Keg' Energy is South Korea’s largest imported commodity category. The country’s four major refiners—SK Energy, GS Caltex, S-Oil, and HD Hyundai Oilbank—have a combined refining capacity of 3.2 million barrels per day. Their dominance at the retail level is staggering. As of February 2026, South Korea had 10,646 gas stations nationwide. Market share by brand stood at: SK Energy (24.8%), S-Oil (21.3%), HD Hyundai Oilbank (21.3%), and GS Caltex (18.8%). Together, these four firms controlled 86.2% of all gas stations nationwide. S-Oil was the latest entrant into the gas station business among the four, launching its retail operations only in 2000. Its rapid rise was fueled by strong backing from its largest shareholder, Saudi Aramco—S-Oil imports approximately 94% of its crude oil from the Middle East, far exceeding GS Caltex’s 70%, SK Innovation’s 65%, and HD Hyundai Oilbank’s 50%. Yet monopoly has bred corruption. In July 2026, South Korean prosecutors formally indicted all four companies, accusing them of colluding to artificially inflate domestic fuel prices amid Middle Eastern conflicts. Investigations confirmed that senior executives coordinated to fix both timing and magnitude of price hikes. The volume of oil transactions manipulated through collusion between HD Hyundai Oilbank and SK Energy alone reached ₩14.2 trillion (approximately USD 9.2 billion). Prosecutors described the scheme as 'long-standing and institutionalized misconduct.' SK Energy was found to have colluded with HD Hyundai Oilbank during wartime to raise prices uniformly—by 30–40 won higher than competitors. Thus, energy chaebols simultaneously ensured national energy security—and drove up fuel costs borne by Korean consumers. 3.3 Steel and Minerals: From 'Steel Alliance' to Global Resource Competition Steel is a foundational industry in South Korea, standing alongside semiconductors and shipbuilding as one of the nation’s economic pillars. POSCO (Pohang Iron and Steel Company), founded in 1968, marked the dawn of Korea’s heavy and chemical industrialization—and ranks among the top ten chaebols. Its Gwangyang and Pohang steelworks once ranked first and second globally in output. In its early years, POSCO relied heavily on technological support from Japan’s Nippon Steel, forming a long-term 'steel alliance' through mutual shareholding. But starting in the 2020s, POSCO accelerated its 'weaning' process—selling all its shares in Nippon Steel and redirecting capital toward new-energy materials. In critical mineral sectors, chaebol investments have grown even more aggressive. In November 2025, POSCO Holdings announced a KRW 1.1 trillion (approx. USD 750 million) investment to secure lithium resources in Australia and Argentina.

KRW 75 billion! Truth revealed behind history’s largest energy price-fixing case—four oil firms jointly indicted

Global Zero Carbon The 'New Youth' of Carbon Neutrality Korea Economic Daily Summary: While the South Korean government exhausted every measure to stabilize supply and curb soaring fuel prices, the country’s four largest refiners were scheming to profit from war—driving retail prices ever higher. → This is the 2,053rd original article published by Global Zero Carbon. In March this year, South Korea’s president reportedly lost sleep over skyrocketing domestic fuel prices. Now, the truth has finally emerged: the four major refiners were secretly colluding to hike prices. On July 6, the Seoul Central District Prosecutors’ Office indicted SK Energy, GS Caltex, HD Hyundai Oilbank, and S-Oil—the four largest South Korean refiners—charging them with colluding to manipulate fuel prices immediately after the outbreak of the Iran War, in violation of the Fair Trade Act. Their actions triggered an unprecedented surge in domestic fuel prices, sparking public panic. Together, these four firms control 98.6% of South Korea’s fuel market—effectively determining the entire trajectory of refined fuel pricing. Prosecutors estimate the total value involved in this price-fixing scheme at ₩14.2 trillion (approximately RMB 75 billion). Following the Iran War’s outbreak, South Korea effectively entered an 'energy wartime state': the government scrambled to stabilize fuel prices while urgently seeking alternative oil supplies. President Lee Jae-myung convened multiple emergency economic meetings and publicly stated: 'Energy disruptions have thrown the entire world into chaos—the severity exceeds all expectations. I couldn’t sleep all night.' To stabilize domestic fuel prices, South Korea implemented a petroleum price cap—the first such measure in 30 years—twice: on March 13 and March 27—to ease fuel cost burdens on households and businesses. Simultaneously, South Korea launched emergency energy diplomacy and tapped into its strategic petroleum reserves, dispatching delegations to Kazakhstan, Oman, and Saudi Arabia to urgently negotiate additional supplies of crude oil and naphtha. Before newly imported crude arrived, the government released strategic reserves; once new shipments docked, it replenished inventories—thus preventing supply shortfalls. Through these emergency measures, South Korea secured roughly 110 million barrels of replacement crude oil between April and May—equivalent to 60–70% of its usual import volume for the same period. Yet despite the government’s exhaustive efforts to stabilize supply and rein in prices, the four major refiners pursued 'war profits,' pushing retail fuel prices relentlessly upward. That’s because final gasoline and diesel prices are not determined solely by international oil prices. Refining, transportation, storage, logistics, and distribution costs also significantly influence market behavior. After fuel prices surged sharply, prosecutors launched large-scale searches and seizures on March 23 against the four refiners and the Korea Petroleum Association—uncovering what has become South Korea’s largest-ever fuel price-fixing scandal in recent years. President Lee Jae-myung warned on social media that refiners involved in price manipulation would be held accountable—and vowed to deploy all lawful measures to combat unethical business practices. So how exactly did these firms collude? The biggest loophole lay in Korean refiners’ 'advance pricing' wholesale mechanism. Each day, refiners announce a provisional wholesale price—termed the 'advance price'—to gas stations. Stations must purchase fuel in advance at this price and set their retail prices accordingly; final settlement occurs at month-end based on the refiner’s officially confirmed price.

South Korea Indicts Six Petrochemical Firms Over W16.4 Trillion Price-Fixing Case

Oct 2, 2026

South Korean prosecutors indicted six petrochemical firms and 37 executives for fixing prices of products like PVC and plasticizers worth 16.4 trillion won. Prosecutors call it the country's largest cartel case involving major players like LG Chem and OCI.

icis

2026-03-31

South Korea Petrochemical Industry Begins Production Cuts

2026-10-02

South Korea Indicts Six Petrochemical Firms Over W16.4 Trillion Price-Fixing Case

South Korea Indicts Six Petrochemical Firms Over W16.4 Trillion Price-Fixing Case

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