South Korea's four major refiners indicted for price-fixing after Iran war oil spike

Prosecutors investigating an unusual surge in domestic oil prices immediately after the outbreak of the US-Iran war have concluded that price-fixing was the primary cause, and have indicted South Korea's four major refiners.

The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (chief prosecutor Na Hee-seok) announced Sunday that it had indicted HD Hyundai Oilbank, SK Energy, GS Caltex and S-Oil on charges of violating the Monopoly Regulation and Fair Trade Act.

Prosecutors also indicted the head of HD Hyundai Oilbank's pricing division, identified only as A, in custody, and indicted two other HD Hyundai Oilbank employees — a senior manager identified as B and the legal affairs division head identified as C — without detention. C also faces charges of destroying evidence. A GS Caltex domestic sales division head, identified as D, was likewise indicted without detention.

According to prosecutors, the four refiners are accused of exploiting their dominant position over gas stations from January 2021 through June of this year — forcing them into exclusive-purchase contracts, unilaterally dictating supply prices, and penalizing stations that accepted products from rival companies with large damage claims. The four companies together hold a combined market share of 98.6 percent, prosecutors said.

C, the HD Hyundai Oilbank legal affairs chief, is accused of learning in advance about an on-site inspection by the Korea Fair Trade Commission in March and deleting internal documents that compiled competitor pricing information. D is accused of similarly learning about the inspection in advance and deleting an internal messaging channel set up to share pricing-meeting materials.

Prosecutors said that despite the four refiners having already stockpiled substantial crude oil reserves before the US-Iran war broke out on Feb. 28 — meaning there was no inevitable reason for a sharp price increase — all four companies simultaneously raised their supply prices to an unprecedented degree.

Prosecutors believe that immediately after the war broke out, the pricing chiefs at HD Hyundai Oilbank and SK Energy colluded to raise prices in a way that kept SK Energy's rates roughly 30 to 40 won higher than HD Hyundai Oilbank's, while GS Caltex and S-Oil consciously followed the agreed-upon prices in parallel.

Prosecutors also believe that as far back as around July 2024, HD Hyundai Oilbank and SK Energy had been sharing each other's supply price information and setting prices at fixed intervals to consolidate their market positions.

The two companies each designated staff to obtain the other's pricing information. The arrested HD Hyundai Oilbank division chief had served as the person responsible for tracking SK Energy's prices before moving to that company in August last year, prosecutors said, describing him as the central figure who led the price-hike agreement.

Prosecutors said they also confirmed acts of gapjil — "the abuse of a dominant position" — against independent gas station operators. Even after the Fair Trade Commission issued corrective orders and the Supreme Court ruled that refiners are prohibited from forcing gas stations into exclusive-purchase contracts against their will, the four companies continued to enter such contracts on the same terms as before, prosecutors said.

The investigation into the alleged oil price manipulation began in earnest in March, when prosecutors raided the four refiners and the Korea Petroleum Association. Additional witness summons and searches followed in April. A was taken into custody on June 18.

President Lee Jae-myung also referenced the investigation at a Cabinet meeting in March. "I heard prosecutors recently conducted a swift, large-scale probe into the price-fixing. The results came out very well. The Ministry of Justice should give the investigation team a commendation," Lee said.

A Seoul Central District Prosecutors' Office official said the office would "do everything possible to secure convictions befitting the gravity of crimes that exploited national turmoil, and will work closely with the Ministry of Trade, Industry and Energy and other relevant agencies to prevent a recurrence."