The Ongoing Impact of the Hormuz Strait on Global Energy Security

The military conflict between the United States and Iran is nearing an end, with both sides shifting focus from escalation to finding an exit strategy. Although military tensions remain, there is a prevailing atmosphere of seeking resolution. International oil prices are stabilizing amid hopes that the worst-case scenarios can be avoided.

Many will remember this situation as a military confrontation between the U.S. and Iran. However, from an economic perspective, the real story lies elsewhere, as the implications of the Hormuz Strait may outlast the conflict itself.

The Hormuz Strait is one of the world's most critical energy corridors, with approximately 20% of global maritime oil traffic passing through it. Oil and natural gas produced in Saudi Arabia, Iraq, Kuwait, Qatar, and the United Arab Emirates traverse this narrow waterway to reach global markets. South Korea is no exception, as most of the Middle Eastern oil it imports passes through this strait.

Iran is acutely aware that it cannot match U.S. military might. However, it possesses another weapon: the Hormuz Strait.

In fact, a complete blockade of the strait is not necessary. The mere possibility of such a blockade can influence international oil prices, increase shipping costs, and drive up vessel insurance rates. Markets reflect future risks in current prices; prices rise not solely due to actual shortages but also from concerns about potential shortages.

This situation has played out similarly. As forecasts emerged that the conflict could drag on, international oil prices reacted immediately. Currency exchange rates and financial markets also experienced volatility. The global economy began to incur costs even before any actual shocks occurred.

This is a characteristic of the modern economy.

Past wars were fought with guns, tanks, and fighter jets. However, 21st-century geopolitics operates through supply chains, logistics networks, and energy corridors. It is no longer necessary to capture an enemy's capital; simply disrupting the pathways of the global economy can exert significant pressure.

The Hormuz Strait symbolizes more than just a shipping lane; it represents the connection between energy security and economic security.

South Korea is a global manufacturing powerhouse, having grown through exports of semiconductors, automobiles, shipbuilding, and steel. However, it is also highly dependent on energy imports. Disruptions in oil and gas supplies can impact the entire industrial sector. The importance of energy has only increased with the rise of artificial intelligence (AI).

AI data centers and semiconductor factories consume vast amounts of electricity. In the future, national competitiveness will hinge not only on how well semiconductors are produced but also on the ability to provide stable electricity and secure energy supply chains.

Ultimately, the lesson from the current Middle Eastern situation is clear.

While wars may end, the importance of energy security does not. It is difficult to discuss the future while maintaining a structure that allows oil prices, exchange rates, and inflation to fluctuate whenever international relations become unstable.

We often refer to semiconductors as South Korea's most important strategic asset, which is not incorrect. However, semiconductor factories require electricity to operate, and electricity depends on a stable energy supply. There can be no AI without energy, nor can there be advanced industries without it.

This war is coming to a close. However, the bill from Hormuz for the global economy is far from settled.

What we must truly prepare for is the post-war period. More critical than the immediate military conflict are energy security, supply chain stability, and the resilience of the national economy.

Even after the gunfire ceases, the economy will receive its bill, and that bill will still read 'Hormuz.'

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