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

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

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

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.