The government of South Korea is preparing to impose a price ceiling on fuel for the first time in three decades, as the spike in international oil prices caused by the conflict in Iran is putting strong pressure on the country’s economy.

Oil prices surged on Monday as producers in the Middle East limited their production, while the United States intensified pressure on Tehran by demanding the country’s “unconditional surrender.”

Futures contracts for Brent crude rose by as much as 13%, reaching $104.7 per barrel. At the same time, U.S. crude West Texas Intermediate surged by as much as 30%, hitting $118.46 before trimming its gains.

In a briefing on Monday, the President of South Korea, Lee Jae-myung, said the government will immediately move forward with implementing a price cap system on petroleum products, stressing that the recent price increases are excessive.

At the same time, Seoul is examining ways to diversify its energy supplies, seeking new supply routes that will not pass through the Strait of Hormuz, one of the most critical sea lanes for global oil transport.

According to Yonhap News Agency, the average gasoline price in Seoul exceeded 1,900 won (about €1.1) per liter on Friday for the first time in nearly four years.

President Lee described the crisis in the Middle East as a “significant burden” for the country’s economy, which heavily depends on trade and energy imports from the region.

At the same time, the country’s markets are showing strong volatility. The main stock index, KOSPI, recorded the worst daily drop in its history last week, falling by 12%, followed by a 10% rise the next day.

President Lee also called on authorities to expand, if necessary, the market stabilization program activated on March 6, clarifying, however, that it should not be used to artificially support stock prices.

Similar moves are being considered by other Asian countries. Japan is reportedly preparing for a possible release of oil from its strategic reserves, while Vietnam announced it will abolish import tariffs on fuel in order to ensure energy sufficiency.