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Korea's industries enact emergency measures as Iran closes major supply route

Published: 01 Mar. 2026, 17:47

An aerial view of the Iranian shores and the island of Qeshm in the Strait of Hormuz on Dec. 10, 2023. [REUTERS/YONHAP]

Iran closed the Strait of Hormuz following U.S. and Israeli airstrikes that took place on Saturday, prompting Korea’s energy, shipping and aviation industries to activate emergency measures as companies brace for higher oil prices, rising transportation costs and potential supply disruptions.

Iran’s Islamic Revolutionary Guard Corps announced on Saturday that passage through the strait was no longer safe and halted vessel traffic, according to Reuters and AFP on Sunday.

The European Union Naval Force also reported that ships told authorities they could not pass through the waterway. Some vessels have changed course while others remain at sea.

Korea has not imported Iranian crude since 2018 after the United States reinstated sanctions on Iran’s oil exports, but Seoul sourced 69.1 percent of its crude oil from the Middle East last year, and more than 95 percent of that volume transited the strait. A prolonged closure could disrupt domestic energy supply and shipping schedules.

Strait closure raises energy and shipping risks

Major refiners held emergency meetings on Sunday to assess the situation.

A handout photo made available by Iran's Islamic Revolutionary Guard Corps's official website Sepahnews on Feb. 17 shows IRGC conducting a military drill in the Strait of Hormuz, in the Persian gulf, southern Iran. [EPA/YONHAP]

Government and private sector oil reserves amount to roughly seven months of stockpiles, which should limit short-term supply disruptions.

The greater concern lies in a prolonged crisis. Companies expect delays in crude import schedules and higher logistics costs if the situation drags on.

If the closure continues, disruptions to crude imports could combine with higher transportation and insurance costs, pushing up overall energy expenses. Analysts expect profit margins to come under pressure in energy-intensive industries such as petrochemicals and steel.

Meanwhile, steel companies could face changes in coal prices and higher shipping costs, as they import key materials by sea to make steel in large furnaces. Companies that use electric furnaces may also have to pay more for electricity.

Higher logistics costs could further weigh on export margins for key manufacturing sectors including semiconductors and displays.

Global industrial gas suppliers such as Linde, Air Liquide and Air Products operate supply networks that provide gases used in semiconductor production. These companies run major production bases in Korea and other countries, but some materials rely on overseas supply chains. Any disruption in maritime transport could raise shipping costs or delay deliveries.

Shipping firms review contingency plans

The Korea Shipowners’ Association and major domestic shipping companies including HMM, SK Shipping and Pan Ocean have activated emergency response systems.

“One container ship is currently in the Strait of Hormuz, and about six bulk carriers are in nearby waters,” an HMM representative said. “We are reviewing contingency plans such as rerouting vessels or suspending operations."

A map showing the Strait of Hormuz and Iran is seen behind a 3D printed oil pipeline in this illustration taken on June 22, 2025. [REUTERS/YONHAP]

The Korea International Trade Association (KITA) also held an emergency export and import logistics meeting to assess risks and discuss response measures.

Exports to seven countries near the Strait of Hormuz account for 1.9 percent of Korea’s total shipments, so the direct impact remains limited. However, if the conflict expands into a full-scale war, companies may struggle to secure safe alternative routes.

Shipping companies could raise freight rates by as much as 50 to 80 percent, and delivery times could lengthen by three to five days. Industry officials warn that such increases could place a heavier burden on small and midsize exporters.

Airlines and companies secure operations

Airlines have also adjusted operations. Korean Air suspended its Incheon to Dubai route through Thursday. Qatar Airways, Emirates and Etihad Airways have canceled some flights or revised schedules.

Korean Air and Asiana Airlines aircraft sit parked on the apron at Incheon International Airport on Nov. 22, 2024. [NEWS1]

The Middle East serves as a key transit hub linking Europe and Africa and acts as a major air cargo center. Extended airspace restrictions could disrupt shipments of high-value goods such as semiconductors, batteries and pharmaceuticals. Higher jet fuel prices could also push up airfares.

Companies have moved to protect staff in the Middle East. Firms operating in Israel such as Samsung Electronics, LG Electronics and Hanwha Group have relocated Korean expatriates and their families to Jordan, according to the Korea Trade-Investment Promotion Agency.

Hanwha Group also began checking on the safety of employees and their families staying in Saudi Arabia, United Arab Emirates, Qatar and Kuwait.

Industry officials are watching closely to see whether the situation will end as a short-term shock or develop into a long-term risk that forces companies to adjust their Middle East business strategies.

“In the short term, we can hold out with stockpiles and response systems,” an industry official said. “But if the blockade continues, oil prices, freight rates and insurance costs could rise at the same time, creating a compound increase in costs. The level and duration of military tensions will determine the scale of the impact on industry.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY PARK YOUNG-WOO, KO SUK-HYUN [[email protected]]