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U.S. strikes on Iran may pose huge problem for big projects by Korea Inc. in Middle East

Published: 04 Mar. 2026, 19:10 Updated: 04 Mar. 2026, 19:41

Hyundai Motor Group Executive Chair Euisun Chung visits the construction site of Hyundai Motor Manufacturing Middle East in Saudi Arabia and encourages employees before heading to the factory on Oct. 26, 2025. [YONHAP]

U.S. and Israeli strikes on Iran could disrupt Korea's major companies, with 140 regional subsidiaries in the Middle East, as delays in major infrastructure orders emerge as the biggest risk.

Delays in construction and energy developments across the region could ripple through Korean industries, where conglomerates operate affiliates involved in the construction of power plants, industrial facilities and large infrastructure systems.

The risk stems from the time-consuming nature of the projects Korean companies handle in the region, where many subsidiaries support construction and energy developments that can take years to complete.

Construction companies account for the largest share with 26 subsidiaries, reflecting the region’s focus on large infrastructure developments such as Saudi Arabia’s Neom City. Prolonged geopolitical tensions could delay project schedules or disrupt supply chains.

Thirty conglomerates designated by the Fair Trade Commission operate 140 subsidiaries across 10 Middle Eastern countries, data from the Korea CXO Institute showed Wednesday. Those operations account for 2.2 percent of the 6,362 overseas subsidiaries run by major Korean conglomerates.

About 67 percent of those subsidiaries are concentrated in the United Arab Emirates (UAE) and Saudi Arabia. The UAE hosts 56, while Saudi Arabia has 38. Oman has 12, and Egypt has 11.

A render shows Hyundai Motor’s Saudi production plant at the King Salman Automotive Cluster in Saudi Arabia, where the company held a groundbreaking ceremony for the factory on May 14, 2025. [YONHAP]

By conglomerate, Samsung operates 28 subsidiaries while Hyundai Motor, LG and GS each operate 14.

Samsung's corporate activities include construction projects in Saudi Arabia through Samsung C&T and a semiconductor research center in Israel. Several subsidiaries in the UAE focus on electronics sales, meaning prolonged instability could slow construction work, research activity and sales operations.

Hyundai Motor is also expanding its presence. The company is building a plant capable of producing 50,000 vehicles a year in Saudi Arabia’s King Salman Automotive Cluster. The factory will produce both electric vehicles and internal combustion engine models. Six subsidiaries have been added in the Middle East over the past two years, bringing the total to 14.

Hyosung Heavy Industries, HD Hyundai Electric and LS Electric are monitoring developments closely as they expand power grids and energy facilities in Saudi Arabia, the UAE and Kuwait. Taihan Cable & Solution and LS Cable & System are supplying ultrahigh-voltage cables and submarine cables for projects across the region.

Samsung Electronics Chairman Lee Jae-yong inspects a construction site of the Neom new city project in Saudi Arabia, on Oct. 1, 2023. [YONHAP]

“Ultrahigh-voltage transformers and power generation equipment typically involve work that can take years from order placement to manufacturing, shipping and installation,” an industry source said. “If project owners delay decisions, construction schedules can slip and revenue recognition may also move back."

LG and GS are also monitoring developments as both operate sales, construction and real estate businesses across the Middle East. GS runs eight subsidiaries in Oman focused on plant construction and infrastructure work, while LG operates sales units and infrastructure-related businesses in the region.

If oil prices rise to around $100 per barrel in 2026, Korea’s economic growth rate could fall by 0.3 percentage points, a recent report from the Hyundai Research Institute suggests.

“Rising oil prices create short-term cost pressures, but delays in Middle East infrastructure orders could affect Korea’s entire order-driven industries such as construction, plant engineering and power equipment,” Ju Won, head of research at the Hyundai Research Institute, said.

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 [[email protected]]