This photo shows gas prices at a filling station in Seoul, Oct. 9, as prices have risen sharply following the conflict between Israel and Hamas. Yonhap

Finance Minister Choo Kyung-ho said Tuesday that the conflict between Israel and Palestinian militant group Hamas has raised market uncertainties and is expected to cause greater volatility in oil prices, calling for thorough monitoring and economic contingency plans.

He made the remarks during a meeting with ministry officials to explore ways to minimize the impact of the incident on the Korean economy, according to the Ministry of Economy and Finance.

Hamas launched an unprecedented, massive attack on Israel last Saturday, and the attack is feared to become a wider conflict in the Middle East.

"The international financial market has shown limited reactions to the incident, but uncertainty about its future developments is very high. It is needed to closely monitor the financial and foreign exchange markets at home and abroad round-the-clock and to check contingency plans again to best deal with various scenarios," Choo said.

Greater volatility is also expected in the global oil market, and the government will come up with measures to prevent any supply disruptions, the minister added.

Global oil prices have risen sharply on concerns about the disruption in supply and output from the Middle Eastern regions.

Korea depends on imports for most of its energy needs, and some 67 percent of its crude oil purchases and 37 percent of its total gas deals come from the Middle East.

Fire and smoke rise following an Israeli airstrike in Gaza City, Oct. 8. AP-Yonhap

Choo also stressed the need to beef up the monitoring of the real economy and strengthen efforts to stabilize prices.

The government earlier forecast inflationary pressure would begin to ease around October after the country's consumer prices logged the highest on-year increase in five months in September of 3.7 percent.

The government set this year's target at a 3.3 percent rise in consumer prices, and the figure during the first nine months of 2023 came to 3.7 percent.

Following the meeting, the minister left for Morocco to attend annual meetings of the International Monetary Fund and the World Bank, and the Group of 20 meeting of finance ministers and central bank chiefs, where the ongoing clash is expected to be high on the agenda.

President Yoon Suk Yeol on Tuesday also pointed to the possibility of higher inflation and higher interest rates due to the conflict, and instructed the government to respond appropriately to external uncertainty factors and to "do everything it can to ensure the public's livelihood difficulties are not exacerbated."

Israel's Iron Dome anti-missile system intercepts rockets launched from the Gaza Strip, as seen from Ashkelon in southern Israel, Oct. 9. Reuters-Yonhap

Despite heightening tensions in the Middle East, the benchmark Korea Composite Stock Price Index had added 0.24 percent to 2,414.47 as of 1:30 a.m.

The Korean won was trading at 1,349.95 won, down 0.05 won against the U.S. dollar from the previous session's close.

The Korean stock and foreign exchange markets were closed Monday for Hangeul Day, which celebrates the proclamation of the Korean alphabet. (Yonhap)