Trade deficit doubles, won sharply, energy rises, international gas war 'intensifies'

Foreign media are paying attention to the doubling of Korea's trade deficit, led by a sharp drop in the won and a rise in energy, and an increase in imports 4.5 times that of exports.
As the price of gas, which has grown in absolute importance in Korea, soared, Japan secured a supply of natural gas with Russia, and the US is escalating the conflict between Russia and the Sakhalin project, and in Europe, gas negotiations with Russia are intensifying.
According to Bloomberg on the 1st, "Korea's record trade deficit in August was the lowest in 13 years with the won, and the continued rise in energy prices inflated import costs, increasing pressure on exporters. The trade deficit nearly doubled to $950 million, the largest in data from the 2000s, the Trade Minister said.
Bloomberg pointed to the cause of the double trade deficit by saying that “semiconductor exports decline as the global demand for chips declines” in “weak won, strong energy” on the expansion of Korea’s trade deficit.
The international oil price fell by 8% for two days at the end of August, recording a monthly decline for a consecutive month.
U.S. crude futures fell 12% to $89.55 a barrel on August 31, down from Monday's close of $97.01 a barrel, and Brent crude fell 12% to $96.49 a barrel in August.
On the other hand, US gas prices, which have a direct impact on the Korean economy, are at an all-time high, and import prices are expected to rise further.
Bloomberg attributed the rise in US gas prices to "mainly because oil companies are no longer being given more incentives as oil prices rise."
On the 26th of last month, Russia decided to extend Japan's stake in Sakhalin gas and reunited, Yomiuri reported on the 31st.
The Russian government announced on the 30th that Mitsui Corporation had approved a 12.5% ​​investment in the new operating company of Sakharin 2, an oil and natural gas business in the Russian Far East on the 26th, and Mitsui agreed to maintain its rights and interests as an existing shareholder.
"In addition to complying with sanctions imposed by the international community, Mitsui Corporation will continue to consult with the Japanese government and business partners on future policies from the viewpoint of stable supply and respond appropriately," Mitsui Corporation told Yomiuri on the 31st.
Japan has procured about 10% of its liquefied natural gas (LNG) from Sakhalin-2, and the Japanese government has asked the two companies to consider maintaining profits.
Russia's Gazprom Last month, the gas pipeline connecting Russia and Germany began shutting off the flow of natural gas through Nordstream 1, and three days later, Gazprom announced that "the pipeline will be restarted as no malfunctions have been confirmed". It will resume at 20% of its pre-war capacity, The Washington Post reported on the 31st.
The WP said it has "raised new concerns about Europe's energy supply," and said about a '20% reopening' that "this is the same reduced level it has provided since the end of July."
Regarding ExxonMobil of the United States, which has invested in Sakhalin, the Russian government has blocked the sale of 30% of the stake in the Sakhalin-1 venture company and attempts to transfer the operating rights by statute since early August.
Prior to the decree, Exxon tried to switch operators after Russia's invasion of Ukraine, but the Russian government blocked it, and ExxonMobil notified Russian officials that it would 'sue the Russian government' for 'blocking permission to close the project', 'Wall Street' Journal' reported on the 30th of last month.
Reuters reported on the 3rd of last month that Russia had notified French energy company ENG that it would "completely stop supplying gas from the 1st of next month until full payment of gas is paid" to France.
South Korea's trade deficit for the fifth straight month fell 7.8% in semiconductor exports, which accounted for 20% of August exports, and 5.4% in exports to China.
Energy imports surged 91.8% from a year ago ($9.66 billion) to $18.52 billion, with total imports recording 2.5 times the growth rate of exports, resulting in a trade deficit of $9.47 billion.
Choi Jeong-tae, head of the National Accounts Department at the Bank of Korea's Economic and Statistics Bureau, said on the 1st, "The biggest influence on terms of trade is semiconductors in exports. This is because the share of semiconductors in exports is high and price volatility is high. In terms of imports, it is crude oil. Arithmetic, if each quarter grows by 0.1 to 0.2% in the third and fourth quarters, it is possible to reach the annual economic growth rate of 2.6% in the survey country,” he said.

With the Bank of Japan already authorized to reverse interest rates with the US, the yen's weakness on one day touches the mid-139 yen range, the weakest in 24 years since 1998.

The Ministry of Finance of Japan announced on the 1st that the manufacturing industry's income increased by 52.1% to 33,194 trillion yen in the financial statement statistics by company for the previous fiscal year.

In Japan, the non-manufacturing sector increased 23.7% to 50.7307 trillion yen in industrial income, and ordinary income in all industries excluding financial and insurance was 83.9247 trillion yen, up 33.5% from the previous fiscal year.

Industry income increased for the first time in three years, the highest since fiscal year 1961, and profits increased significantly as the economy recovered to the pre-Coronavirus economy.