Since the outbreak of the war, 26 South Korean vessels have been waiting after being blocked from transiting the Strait of Hormuz. The ships have faced higher costs from insurance surcharges, fuel expenses and increased hazard pay for crews. Business conditions have also worsened, with some cargo owners abandoning shipments despite rising freight rates, raising concerns about a cash crunch for carriers.
In response, the ministry and KOBC will newly provide unsecured credit guarantees to South Korean carriers affected by the war. The program, launched with approval from the oceans minister to address an urgent economic and social crisis, allows carriers to raise short-term operating funds without providing collateral. Support is capped at 2.5 billion won per company, and the guarantee applies to short-term loans with maturities of up to one year, extendable up to five years.
The agencies also revamped their emergency management stabilization funding to cut the time needed to provide support by up to three weeks. Instead of setting up a project entity to indirectly purchase corporate bonds, KOBC will buy the bonds directly. The change is also expected to reduce costs such as various fees.
Under the revised stabilization funding, support is capped at 3 billion won per carrier, with a one-year maturity that can be extended once for one additional year. Carriers can also seek the existing stabilization funding program, which provides up to 100 billion won per company, if needed.
The package also extends repayment periods for principal and interest on existing financial products nearing maturity and temporarily raises the loan-to-value ratio for ship-mortgage loans to 70% to 90% from 60% to 80%. Officials said this should help carriers secure additional liquidity using their vessel assets.
KOBC said it began posting detailed guidance on its website and accepting applications for the unsecured credit guarantee and other support measures starting Tuesday.
The ministry said it secured 1.4 billion won in the first 2026 supplementary budget to help cover insurance surcharges for small and midsize carriers operating in the Strait of Hormuz, with applications to be accepted through KOBC starting in early May.
Oceans Minister Hwang Jong-woo said, "The government will provide comprehensive support so our shipping companies struggling due to the Middle East war do not face funding difficulties," adding it will do its best to keep export-import logistics networks running and prevent disruption to the national economy.
KOBC President Ahn Byung-gil said uncertainty in the shipping industry has surged due to the war and that the program will help ease temporary liquidity strains and bolster stability across the sector.
* This article has been translated by AI.
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