Hormuz shock calls for a reset of Korea’s energy strategy

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Hormuz shock calls for a reset of Korea’s energy strategy

Published: 04 May. 2026, 00:00

Audio report: written by reporters, read by AI

Drone view of oil tanker Helga berthed at one of Iraq's southern offshore oil terminals near Basra as it prepares to load crude oil, becoming the second vessel to arrive since the closure of the Strait of Hormuz, April 24. [REUTERS/YONHAP]

More than two months into the Iran war, the closure of the Strait of Hormuz has pushed oil prices sharply higher and plunged the global economy into turmoil. Korea, heavily dependent on Middle Eastern crude, has been hit particularly hard. The OECD quickly cut Korea’s growth forecast from 2.1 percent to 1.7 percent, marking one of the steepest downgrades among major economies. JPMorgan also identified Korea as one of the countries most vulnerable to oil price volatility.

The disruption extends beyond crude oil. Imports of naphtha, often described as the “rice of industry,” have been blocked, forcing petrochemical plants to halt or scale back production. Shortages have even spread to everyday items such as garbage bags and medical syringes.

A massive solar panel complex in South Jeolla [JOONGANG ILBO]

The International Energy Agency has warned that energy supply conditions are unlikely to return to prewar levels even after the conflict ends. Korea’s energy security now faces a new level of uncertainty. If a return to the previous system is no longer possible, a fundamental redesign of energy strategy is required.

The core principle of energy security is diversification. The more concentrated supply becomes in specific regions or routes, the greater the risk. Korea has made some progress. The share of Middle Eastern crude, which exceeded 90 percent in the mid-2000s, has declined to about 69 percent and more recently to around 56 percent as imports from the Americas and Africa increased. Yet this remains insufficient.

A “post-Hormuz” strategy is essential. Overland pipelines are emerging as alternatives. The International Energy Agency (IEA) has proposed a pipeline linking Turkey and Iraq, while a long-distance route connecting Iraq, Kuwait, Saudi Arabia and Oman has also been discussed. Korea should consider participating in such projects from the early stages to secure stable supply. Expanding joint stockpiling programs, in which oil from producing countries is stored in domestic facilities, could also provide priority purchase rights in times of crisis.

Overseas resource development is another area requiring national focus. Securing resources abroad can effectively substitute for domestic reserves. Yet Korea’s self-sufficiency rate in oil and gas stood at only 10.8 percent in 2024, down from 15.5 percent in 2015. Japan’s rate, by contrast, reached 42.1 percent and aims to exceed 60 percent by 2040.

The gap reflects differences in policy consistency and expertise. Japan has steadily supported its resource development institutions regardless of political changes. The Japan Organization for Metals and Energy Security employs a large number of specialists, including geologists, engineers and investment professionals, many of whom build decades of experience in their fields. In Korea, resource development policies have fluctuated with political cycles, at times being promoted and at other times abandoned. This inconsistency has weakened institutional capacity.

The next test for energy security reform lies in the 12th Master Plan for Electricity Supply and Demand, now under discussion. According to the Ministry of Climate, Energy and Environment, electricity consumption in 2040 could increase by up to 70 terawatt-hours compared with the previous plan, equivalent to 1.4 times Seoul’s annual consumption or the output of three to seven new nuclear reactors. The surge is driven by expanding artificial intelligence data centers and semiconductor clusters.

The key question is how to meet this demand. The government’s current approach remains heavily focused on renewable energy. Its recent energy transition plan aims to raise the share of renewables to over 20 percent by 2030. However, it does not address the need for additional nuclear power.

Expanding renewable energy is necessary, but practical limitations remain. Korea’s solar power deployment is already among the highest in the world, leaving limited room for further expansion. The intermittency of renewables also poses challenges for stable power supply. Dependence on imported equipment, particularly from China, raises additional concerns about energy security.

Units 3 and 4 of the Saeul nuclear reactors are under construction in Seosaeng-myeon, Ulju County, Ulsan, on Jan. 26. [NEWS1]

Globally, many countries are turning back to nuclear power. The IEA reports that new nuclear capacity under construction is at its highest level in 30 years, with total capacity expected to increase by at least 35 percent by 2035.

In this context, Korea’s energy policy must move beyond political preferences and bureaucratic divisions. A realistic energy mix that ensures both security and industrial competitiveness is needed, and many experts argue that additional nuclear construction is unavoidable. Given that building a nuclear plant can take up to 15 years, discussions should begin immediately.

The crisis has also exposed weaknesses in governance. Responsibility for economic and energy security is fragmented across multiple ministries, making coordination difficult. During the recent response, the absence of a clear control tower became evident. While emergency meetings have been convened, they have largely been reactive rather than proactive.

Ambiguity in authority has led to inconsistent measures, such as the early introduction of a price cap on oil, which conflicted with demand management policies and reduced policy flexibility for future crises.

Institutional fragmentation has further complicated matters. Energy policy functions have been divided between ministries, creating a disjointed system in which electricity, oil and gas are managed separately. This structure has hindered effective crisis response.

Although current arrangements were not designed with such a crisis in mind, the rapid transformation of global supply chains calls for a comprehensive overhaul. Strengthening an integrated energy governance system and establishing a permanent, powerful control tower are essential.

History shows that countries that respond decisively to crises endure, while those that hesitate fall behind. The current moment offers an opportunity to redesign Korea’s energy security framework.

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.