Four South Korean oil refiners and their employees denied all charges at their first trial, after being indicted on suspicion of leading oil price-fixing by exploiting a Middle East crisis in the immediate aftermath of the Iran war.
Judge Ryu Ji-mi of the Seoul Central District Court held the first hearing on the 20th for HD Hyundai Oilbank, SK Energy, S-OIL (010950.KS) and GS Caltex, along with four executives and staff members, who were charged with violating the Monopoly Regulation and Fair Trade Act.
The four refiners denied all the charges at the hearing. A lawyer for HD Hyundai Oilbank stressed that the indictment portrays the domestic refining industry as riddled with structural corruption and collusion, adding that claims the companies influenced rising oil prices during the Iran war were untrue. The lawyer also pointed out that although the prosecution's investigation period was short, the matter was reported in the press unusually quickly. On charges of obstructing the investigation through the destruction of evidence, the defense acknowledged the facts but explained that the conduct did not amount to an effective obstruction, since no evidence had been lost to prosecutors as a result.
SK Energy said the indictment alleges that the company abused its position in transactions and disadvantaged gas stations by signing full-volume purchase contracts. "The contracts were signed and carried out reflecting the parts that had been reviewed by the Fair Trade Commission and made subject to a corrective order, so this is difficult for us to understand," the company said.
GS Caltex emphasized that independent gas stations can approach multiple refiners at the contract stage. Its lawyer argued that even after signing a contract, a station could exit the relationship by refusing to renew — the point being that the stations were not restricted in their choices but could themselves select the arrangement that suited them. The lawyer added that Supreme Court precedents confirm that full-volume purchases and business agreements are not unfair trade practices. S-OIL said it needed to review the evidence records but was asserting its innocence regarding the charges.
HD Hyundai Oilbank and SK Energy were indicted on the 6th of last month on suspicion of playing key roles in the collusion, exchanging price information with each other to set pricing policy from July 2024 to February this year. GS Caltex and S-OIL are accused of taking part in the collusion by following the rising oil prices. Prosecutors believe the companies artificially manipulated oil prices by exploiting the Middle East crisis after the Iran war.
According to prosecutors, the direct scale of the collusion in this case reaches 14.2 trillion won ($10.2 billion). When the ripple effects of the price-following conduct by GS Caltex and S-OIL are taken into account, prosecutors estimate that anti-competitive effects of about 26 trillion won ($18.7 billion) were generated.
Meanwhile, a hearing was also held on the bail request of a person identified as A, the head of HD Hyundai Oilbank's pricing division, who was indicted while in custody. During the hearing, the defense argued that prosecutors were overstating the severity of the price-fixing.
The defense stressed that while prosecutors allege price-fixing in addition to collusion through information exchange, the conduct actually challenged as price-fixing amounts to only two days of activity. "The indictment itself is vague on that point and has not been proven," the lawyer said.
Prosecutors countered that the defense was minimizing the crime by claiming the price-fixing lasted only two days. "Over those two days, prices rose sharply and simultaneously on an unprecedented scale. A short period does not make it a less serious crime," prosecutors said.
The court set the next month's 22nd as the date for a pretrial hearing, where it will organize opinions on the evidence and plans for witness examination.
