The escalation of the US-Iran conflict and the declared blockade of the Strait of Hormuz are heightening international oil prices and the security crisis.

What Happened

Geopolitical tensions in the Middle East are escalating to their highest level as the United States declared a blockade of the Strait of Hormuz immediately after the collapse of peace talks with Iran. U.S. President Donald Trump stated that the blockade would be implemented to prevent Iran from controlling the strait and gaining economic benefits. U.S. Central Command officially announced that it would blockade maritime traffic for all vessels traveling to and from Iran starting at 11:00 PM KST (10:00 AM ET) on April 13, 2026. However, it added that the passage of vessels not traveling to or from Iranian ports through the Strait of Hormuz would not be obstructed. In response, Mohammad Bagher Ghalibaf, Speaker of the Iranian Parliament, warned that Iran had never trusted the U.S. from the beginning and would strongly resist if U.S. provocations continued. As the U.S.-Iran peace talks in Pakistan concluded without an agreement, financial market uncertainty is amplifying, with international oil prices surging and stock futures markets declining.

Why It Matters

The Strait of Hormuz is a critical energy artery, accounting for approximately 20% of the world's seaborne oil shipments. A blockade of this strait would have an immediate and profound impact on international oil prices, potentially exacerbating inflationary pressures across the global economy. For countries like South Korea, which are highly dependent on energy imports, economic damage from rising raw material prices and increased logistics costs is inevitable. This situation is assessed as a significant geopolitical risk that goes beyond a mere military standoff between the U.S. and Iran, threatening global supply chains and energy security. Recalling past experiences where oil prices surged and the global economy faltered during periods of heightened tension in the Middle East, such as the Gulf War, this blockade portends severe ripple effects. Furthermore, Iran's warning of a strong response makes it impossible to rule out a prolonged situation and the possibility of additional military clashes.

Impact on the Korean Market

The blockade of the Strait of Hormuz is expected to have multifaceted negative impacts on the South Korean economy. First, a surge in international oil prices will further intensify domestic inflationary pressures and increase production cost burdens for companies. In particular, there are concerns about deteriorating profitability in energy-intensive industries such as refining, petrochemicals, aviation, and shipping. The KRW/USD exchange rate could face upward pressure due to strengthened safe-haven sentiment and concerns about a worsening trade balance driven by rising oil prices. This could trigger an exodus of foreign investors from the domestic stock market and dampen overall investment sentiment. Moreover, disruptions in maritime logistics could cause chaos in the production and transportation plans of domestic import/export companies, further increasing global supply chain instability. It is imperative for the South Korean government and companies to urgently seek measures for energy supply stabilization and logistics diversification.

Key Stock Analysis

• WTI Crude Oil (WTI) and Brent Crude Oil (BRENT): Following news of the blockade, international oil prices are expected to surge in the short term. This will affect investor sentiment for energy-related companies and could be perceived as an inflation hedge. Concerns include rising energy costs, increased global inflationary pressures, and higher cost burdens for refining and petrochemical companies due to surging oil prices.
• Gold (GOLD) and Bitcoin (BTC): Safe-haven sentiment strengthens when geopolitical risks escalate. Gold, as a traditional safe haven, and Bitcoin, as a digital safe haven, are likely to see increased investment demand. As geopolitical risks heighten instability in traditional financial markets, some investors may perceive Bitcoin as a digital safe haven, leading to increased demand.
• S-Oil (010950) and SK Innovation (096770): While surging oil prices may generate short-term inventory valuation gains, long-term profitability could deteriorate if refining margins do not keep pace with oil price increases or if demand contracts. Increased transportation costs are also a burden. For S-Oil, rising oil prices may increase refiners' inventory valuation gains, but changes in refining margin spreads and increased transportation costs will have a complex impact on profitability. Similar to S-Oil, SK Innovation will experience increased inventory effects and refining margin volatility due to rising oil prices, and cost burdens in the petrochemical segment could intensify.
• Korean Air (003490): Jet fuel prices constitute a significant portion of airline operating costs, so a surge in oil prices will directly increase jet fuel procurement costs, severely impacting profitability. While some offset may be possible through increased fuel surcharges, the overall burden could grow.
• HMM (011200): Route changes and shipping delays due to the Strait of Hormuz blockade could temporarily drive up freight rates, contributing to improved profitability for shipping companies. However, a contraction in global trade volume or a prolonged logistics crisis could have negative impacts, requiring close monitoring of the situation.

Future Scenarios

Optimistic Scenario: If the U.S. blockade is short-lived and tensions with Iran ease through back-channel negotiations, upward pressure on oil prices would quickly dissipate. In this case, financial markets could see a relief rally and show signs of recovery. Pessimistic Scenario: If Iran takes military retaliatory measures against the Strait of Hormuz blockade, or if the U.S. blockade is prolonged, international oil prices could exceed $100 per barrel. This would amplify concerns about a global economic recession and severely impact the South Korean economy. Investors should closely monitor oil price trends, news of further U.S.-Iran negotiations, and the involvement of major powers in the Middle East situation. In particular, the South Korean government's measures to stabilize energy supply and demand, and companies' risk management capabilities, will be crucial variables.