Energy Shock and Economic Resilience: South Korea and the Iran War

The 2026 Iran War and closure of the Strait of Hormuz have upended global trade and access to energy, prompting governments in Asia and throughout the world to take measures to secure supply chains, ensure continued power generation, and stabilize the economy. The disruption to shipments, shortages of key materials, and substantial increases in crude oil and transportation fuel prices raises questions about what impact the Middle East conflict has on the Korean Economy, and whether it presents a true crisis. This report examines some of the key indicators and signals from the impact of the Iran War on Korea’s economy and assesses what the general outlook is going forward.

This report was jointly published as Issue 20 in the “U.S.-ROK Policy Brief” series by the George Washington University Institute for Korean Studies (GWIKS) and the Institute for Peace and Unification Studies at Seoul National University.

Tom Ramage is Economic Policy Analyst at the Korea Economic Institute of America (KEI). The views expressed are the author’s alone.

This material is distributed by KEI on behalf of the Korea Institute for International Economic Policy. Additional information is available at the Department of Justice, Washington, DC.