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Oil tops $100 per barrel, won breaches 1,500 as Iran war rattles global markets

Published: 16 Mar. 2026, 19:43

A maze of crude oil pipe and equipment is seen with the U.S. and Texas flags flying in the background during a tour by the U.S. Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, on June 9, 2016. [REUTERS/YONHAP]

With global oil prices hovering above $100 a barrel for more than three days, the fear that high prices could persist seems to be becoming a reality, while the dollar-won exchange rate also rose above the 1,500 won level in daytime trading for the first time since March 2009 as the Iran war continues without a clear end in sight.

The shock is spreading to markets involving raw materials such as aluminum and urea as disruptions to maritime shipping intensify. In the market, there are growing expectations that uncertainty will remain elevated for some time unless the United States presents a clearer exit strategy in the Middle East conflict.

West Texas Intermediate (WTI) crude futures jumped more than 3 percent to as high as $102.44 immediately after trading opened in Asia on Monday morning, according to Bloomberg News. Brent crude futures, the global benchmark, also climbed to $106.50.

Brent has remained above the $100 mark since Friday. Dubai crude, the benchmark most closely tied to the Korean economy, was trading in the $127 range as of 4 p.m. on Monday, up about 5 percent.

Over the weekend, news that the United States had attacked Iran’s Kharg Island pushed international oil prices higher. Kharg Island is a key hub through which about 90 percent of Iran’s oil exports pass.

“Our Weapons are the most powerful and sophisticated that the World has ever known, but for reasons of decency, I have chosen NOT to wipe out the Oil Infrastructure on the Island,” U.S. President Donald Trump wrote on Truth Social on Friday evening. The market, however, continues to worry about the possibility of further strikes.

Iran also retaliated on Saturday with a drone strike on the Port of Fujairah in the United Arab Emirates. The port is widely known as a bypass route for the Strait of Hormuz, and some oil-loading operations were suspended after the attack.

A man watches a televised statement by Iran's new Supreme Leader Mojtaba Khamenei on March 12. [YONHAP]

The International Energy Agency moved to stabilize the market, stating that emergency oil reserves would begin flowing first in Asia and Oceania, but market anxieties remain high.

S&P Global Energy explained that even if tanker traffic through the Strait of Hormuz resumes within the next few weeks, oil prices are likely to fluctuate at a monthly average of $70 to $100 a barrel through the year. Should the Strait remain shut for months, oil prices could break past previous records.

The won, meanwhile, fell to its weakest level in 17 years — since the 2008 global financial crisis — as prolonged high oil prices strengthened demand for safe-haven assets. In the Seoul foreign exchange market, the dollar-won exchange rate opened 7.3 won higher at 1,501 won on Monday. The rate later reversed course amid concerns about possible official intervention and ended daytime trading at 1,497.5 won.

“Turning points for the exchange rate could include the moment Trump spells out the conditions for negotiations with Iran,” said Baek Seok-hyun, an economist at Shinhan Bank. “Another could come during preparations for a U.S.-China summit expected at the end of March, when an exit strategy begins to take shape. That could provide the opening for the exchange rate to turn downward.”

If the war drags on longer than expected or Iran retaliates against infrastructure in major oil-producing countries, the won could remain in the 1,500 range for a prolonged period, according to Baek.

A map showing the Strait of Hormuz is seen in this photo taken on June 22, 2025. [REUTERS/YONHAP]

Another problem is that the supply shocks are spreading beyond crude oil to raw materials such as aluminum. The Middle East accounts for 9 percent of global aluminum production, and as shipping disruptions intensify, producers in the region are cutting output. Aluminum prices have risen about 8 percent compared to those before the war.

“Aluminum supply and demand could become a hidden flashpoint in this war, much as they did during the Russia-Ukraine war,” said Hong Seong-gi, an analyst at LS Securities.

Ethanol and urea prices are also up about 10 percent and 35 percent, respectively, compared to those before the war.

“Roughly one-third of the world’s traded urea, the dominant form of nitrogen fertilizer, normally passes through the Strait of Hormuz,” reported the New York Times. “It’s produced in the Middle East because natural gas is an essential feedstock for the fertilizer. Shipment and production suspensions are hitting just as farmers are preparing for the spring planting season.”

With raw material prices continuing to climb, a prolonged period of high exchange rates would translate directly into higher import prices for the Korean economy.

“Energy supply-chain shocks and financial market instability could deal direct and indirect blows to the Korean economy as a whole,” said the Korea Institute for Industrial Economics & Trade. “Measures worth considering include diversifying sources of raw material supply and building a joint procurement system involving the government, public corporations and private companies.”

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 OH HYO-JEONG [[email protected]]