Full-Scale Iran-Israel-U.S. War and the Strait of Hormuz Blockade Crisis: Response Strategies for Korean Companies
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Executive Summary
Following the death of Khamenei in February 2026, the delay in restructuring Iran's leadership has led to a structural deadlock in which the June ceasefire declaration and the July resumption of hostilities have repeated in cycles. Saudi Arabia intervened directly in the war for the first time by jointly striking Iran-affiliated militias with U.S. forces, and as an Egyptian port came under drone attack, the conflict is spreading beyond the Gulf. Kuwait, lacking any alternative route besides Hormuz, suffers direct impacts whenever transit disruptions recur, whereas Saudi Arabia and the UAE can distribute risk through pipelines that bypass via the Red Sea, meaning that responses must differ by oil-producing country. As the U.S. share of Gulf crude oil imports has fallen to as low as 8%, Washington's motivation to intervene in defending the Strait is weakening, while a Saudi-led multilateral maritime defense coalition is emerging as a new security axis. Rather than pursuing a wholesale supply chain overhaul, Korean companies should adopt a conditional readiness strategy that pre-designs response levels for each trigger point, while concurrently pursuing diversification of import sources, hedging of maritime freight rates, and consideration of participation in multilateral security cooperation.
I. Situational Analysis of the Issue
Escalation of the Full-Scale Iran-Israel-U.S. War and the Hormuz Crisis: Situational Analysis
1. Background and Development of the Issue
The current situation originated from the joint U.S.-Israeli airstrikes on February 28, 2026. On the day the war began, an airstrike on Tehran killed Iran's Supreme Leader Khamenei[5]. With the negotiating counterpart gone, the restructuring of Iran's leadership was delayed. In the nearly five months since, a pattern of prolonged deadlock and intermittent flare-ups has repeated.
In June 2026, President Trump officially declared the end of the war and the reopening of the Strait of Hormuz[2]. However, this ceasefire was short-lived. On July 29, a combined U.S.-Saudi Arabian force struck Iran-affiliated militias inside Iraq[1][11]. This was announced as a retaliatory measure for a recent attack[1]. Iran immediately responded by launching a missile attack on a U.S. military base in Jordan[15]. In this process, U.S. Central Command stated that Iran's Islamic Revolutionary Guard Corps (IRGC) had fired multiple ballistic missiles targeting the U.S. base[16]. The U.S. military announced that it had intercepted all of the missiles[16].
From Iran's perspective, this phase is largely defensive in nature. The Tehran Times reported that senior officials of Iran's Supreme National Security Council (SNSC), along with military leadership and the Supreme Leader's advisory group, issued a series of warnings over the past two days[7]. The content of these warnings was that if the United States continues additional military action or intervention in the Strait of Hormuz, broader retaliation would follow[7]. Iranian authorities frame this as a warning to prevent escalation, but in substance it is interpreted as an intent to leverage control over strait transit[7].
2. Current Situation
Starting from July 30, the regional spread of the conflict became evident. Saudi Arabia acknowledged that it had directly intervened in the war for the first time by jointly participating with U.S. forces in strikes against Iran-affiliated militias inside Iraq[11][15]. Around the same period, authorities in Egypt announced that a port facility had suffered an explosion presumed to be from a drone attack[9][11]. This marks the first time since the war began that Egypt has officially confirmed being attacked[11].
The U.S. military announced that it had carried out "powerful" retaliatory airstrikes targeting IRGC facilities[9]. President Trump signaled further strikes against Iran[1][14]. The Turkish media outlet Dünya reported that following President Trump's hardline remarks, Brent crude surged approximately 7%, breaking back above $90 per barrel[14]. Analysis suggests that the missile attack on the U.S. military base stationed in Jordan was the direct trigger for the rise in oil prices[14].
Among the Gulf oil-producing states, Kuwait faces the most structurally severe impact. The Middle East Economic Digest (MEED) identified Kuwait as one of the countries most dependent in the world on tanker shipments transiting the Strait of Hormuz[3]. Unlike Saudi Arabia or the United Arab Emirates, Kuwait does not have an alternative coastline from which to export crude oil outside the Gulf waters[3]. This outlet's assessment is that, since the U.S.-Israeli strikes on Iran on February 28, logistics through the Strait of Hormuz have remained severely blocked[3].
Saudi Arabia is also responding to a separate threat. Gulf News reported that Saudi Arabia formed a maritime defense coalition to secure safe navigation through the Bab el-Mandeb Strait[9]. This is a response to Yemen's Houthi rebels declaring a maritime blockade against Saudi Arabia and claiming attacks on Saudi tankers in the Red Sea and on the kingdom's oil infrastructure[9]. In other words, Saudi Arabia finds itself in a two-front situation, simultaneously exposed to threats emanating from Hormuz and from the Red Sea.
3. Key Actors and Their Positions
Iran has made clear its policy of readiness to escalate in response to U.S. military action and intervention in the Strait of Hormuz. The SNSC and military leadership have declared that if the U.S. carries out further attacks, broader retaliation will follow[7]. For Iran, control over Hormuz is a key asset for maintaining leverage in negotiations. Oman's Times of Oman cited an Axios report stating that the Trump administration is considering airstrikes on Iranian energy infrastructure to pressure Iran into accepting ceasefire terms[13]. Should this occur, Iran's level of response is likely to escalate further.
The United States continues to conduct retaliatory airstrikes targeting IRGC facilities and Iran-linked militias[1][9]. President Trump has publicly signaled a hardline response against Iran[1][14]. However, America's motivation for engagement in the Middle East now rests on structural conditions different from the past. According to EAI analysis, following the shale revolution, the U.S. share of Gulf crude oil imports plummeted from 25% in 2014 to approximately 8% in 2025[12]. This has led to an assessment that "the United States' direct economic motivation to protect the Strait of Hormuz" has weakened[12]. At the same time, there is also an analysis suggesting that if a Hormuz blockade were to reignite inflation within the United States, the resulting domestic political burden could mean that improved energy self-sufficiency instead functions as "a factor accelerating an early return to negotiations"[12].
Israel maintains a state of maximum alert, premised on a prolonged standoff with Iran. In an interview with Haaretz, Prime Minister Netanyahu predicted that once the conflict with Iran ends, the Strait of Hormuz will lose its strategic leverage over energy markets[4]. He mentioned that energy pipelines would be relocated to a route passing through the Red Sea to Israel on the Mediterranean, instead of via the strait[4]. This is read as a remark signaling Israel's strategic intent to cultivate the Red Sea-Mediterranean axis as an alternative energy corridor.
Saudi Arabia has emerged as a party to the war for the first time by jointly participating with U.S. forces in strikes against militias in Iraq[11][15]. At the same time, on the Red Sea-Bab el-Mandeb axis, it has taken independent action by forming a multilateral maritime defense coalition in response to the Houthis' declared maritime blockade[9]. EAI's analysis notes that this coalition has proposed to expand its membership from 14 countries to 43, and evaluates this as an attempt to build an independent multilateral security framework that reduces dependence on the U.S. security umbrella[5]. Saudi Arabia is in a position where it must manage risks exposed simultaneously on both the Hormuz and Red Sea fronts.
Kuwait is one of the countries most severely affected by this crisis, as a structurally vulnerable state lacking any alternative route[3]. As a political actor, it has little scope to influence the escalation, but if the strait blockade becomes prolonged, its crude oil exports themselves are fundamentally constrained[3].
Egypt has been drawn into the escalating conflict in an unintended manner, acknowledging for the first time since the war began that its own territory had been attacked[9][11]. The perpetrator behind the port facility explosion has not yet been confirmed, but the fact that Egypt, which manages the Suez Canal, suffered physical damage is itself a factor heightening concerns over the stability of the Red Sea-Suez axis.
4. Key Issues
The first key issue concerns the credibility of the sustainability of U.S. engagement. There is an assessment that, as the United States' energy self-sufficiency has increased, its structural incentive to commit resources to defending Hormuz at the same level as in the past has diminished[12]. This could lead to pressure on allies to shoulder a greater share of the burden[12].
The second key issue is the difference in degree of exposure among Gulf oil-producing states. Saudi Arabia and the UAE possess alternative coastlines outside the Gulf, while Kuwait does not[3]. This asymmetry can generate differing interests even among oil-producing states regarding crisis response priorities.
The third key issue is the concurrent destabilization of axes beyond Hormuz. The Houthi threat in the Red Sea and Bab el-Mandeb, along with the damage to the Egyptian port, demonstrates that Hormuz risk is not a single chokepoint issue but is transforming into a compound maritime transport crisis[9][11].
The fourth key issue is the feasibility of Israel's proposed "de-Hormuzification" concept. Netanyahu's remarks about an alternative Red Sea-Mediterranean pipeline route[4] reflect an intent to reduce the strait's strategic value over the long term, but the prevailing assessment is that at this point it is closer to political rhetoric. In the short term, Gulf oil-producing states do not have the physical infrastructure in place to rely on this route.
II. In-Depth Analysis of the Issue
Escalation of the Full-Scale Iran-Israel-U.S. War and the Hormuz Crisis: In-Depth Analysis
1. Analysis of Root Causes
The root of this escalation lies in the power vacuum that emerged within Iran following Khamenei's death in the February 28 airstrike[5]. A state in which there is no supreme decision-maker capable of coming to the negotiating table has persisted for over five months. Early in the war, the Trump administration declared that the war would end "within 4 to 5 weeks," but this judgment underestimated the political variable of restructuring Iran's leadership[5]. An EAI report characterizes this situation as "a structural limitation stemming from the absence of a negotiating counterpart"[5]. When the channel for negotiation is blocked, military pressure remains the only means of communication. President Trump's June declaration of the war's end and the reopening of Hormuz merely papered over this structural problem without resolving it[2]. The reignition on July 29 is close to a foregone outcome.
Iran characterizes this phase as defensive in nature, but in substance an intent to use transit rights through the strait as a negotiating lever is discernible. The warning from the SNSC and military leadership, as reported by the Tehran Times, states that "if the United States continues additional military action or intervention in the Strait of Hormuz, broader retaliation will follow"[7]. This reflects Tehran's perspective of viewing the strait not as an object of blockade threats but as a negotiating card that Iran holds. This is also the backdrop for Prime Minister Netanyahu's remark that "the strait will lose its leverage over energy markets after the war ends"[4]. Israel has publicly disclosed a concept to neutralize Iran's geographic advantage itself through building a bypass pipeline via the Red Sea and the Mediterranean[4].
2. Structural Context
Political Structure: Alliance Fractures and Multilateralization
The misalignment of strategic objectives between the United States and Israel forms the political backdrop of this crisis[5]. Washington wants Iranian denuclearization and an early end to the war, but Israel aims at the military neutralization of the Iranian regime itself. This gap has spurred Saudi Arabia's independent action. Saudi Arabia acknowledged directly intervening in the war for the first time on July 29 by jointly striking Iran-affiliated militias in Iraq with U.S. forces[9][11][15]. At the same time, in response to Houthi attacks on Saudi tankers and the declared maritime blockade, it formed a maritime defense coalition to secure safe navigation through the Bab el-Mandeb Strait[9]. EAI's analysis notes that this coalition has been proposed to expand "from 14 countries to 43," and evaluates this as "an attempt to build an independent multilateral security framework that departs from dependence on the U.S. security umbrella"[5].
Economic Structure: U.S. Energy Self-Sufficiency and Burden-Shifting
The United States' direct economic motivation for defending the Strait of Hormuz has weakened markedly compared to the past. According to an EAI report, the U.S. share of crude oil imports from the Gulf region plummeted from 25% in 2014 to approximately 8% in 2025, and the country transitioned to a net energy exporter after 2020[12]. This structure simultaneously generates two opposing forces. On one hand, the United States' domestic political legitimacy for protecting the strait has weakened, increasing its incentive to shift the burden onto allies[12]. On the other hand, a spike in oil prices resulting from a Hormuz blockade would reignite inflation within the United States, feeding back as a domestic political burden[12]. EAI analyzes this by noting that "improved energy self-sufficiency functions not to reinforce strategic patience but to accelerate an early return to negotiations"[12]. Indeed, the Axios report that President Trump is considering additional strikes on Iranian energy facilities emerged within this very pressure structure[13]. Striking energy facilities is thus being considered as a means of pressure to bring about a ceasefire agreement, showing that military action is intertwined with the economic necessity of an early settlement in negotiations.
Security Structure: Asymmetric Maritime Vulnerability
The degree of maritime exposure among Gulf oil-producing states is not uniform. Kuwait, lacking an alternative coastline outside the Gulf waters, is cited as one of the countries most dependent on Hormuz in the world[3]. In contrast, Saudi Arabia and the United Arab Emirates possess some infrastructure that allows them to bypass via the Red Sea or the Sea of Oman[3]. This asymmetry divides how Gulf oil-producing states respond. While Kuwait is passively exposed to strait risk, Saudi Arabia has the capacity to take active countermeasures such as forming a maritime defense coalition[9]. The Carnegie Endowment for International Peace notes that the ripple effects of this crisis are not confined to the Gulf region. Its assessment is that Maghreb countries such as Morocco and Algeria are also placed in a position where they must manage the global economic shock caused by the strait blockade[6].
3. Comparison with Historical Precedents
The closest precedent to this crisis is the U.S.-Iran conflict in the first half of 2025. An EAI report records the following course of events: "Tensions between the United States and Iran escalated into military engagement in early 2025, and after roughly four months of conflict, President Trump officially declared in June 2026 the end of the war with Iran and the reopening of the Strait of Hormuz"[2]. At the time as well, the three chokepoints of the Red Sea, Hormuz, and Malacca simultaneously became unstable, and Brent crude broke above $100 per barrel[2]. The implication of this precedent is clear: a ceasefire declaration does not mean the structural resolution of navigational risk. This is corroborated by the fact that reignition occurred on July 29, barely a month after the June 2026 reopening declaration[2][1].
In a longer-term context, the "Tanker War" during the Iran-Iraq War of the 1980s is structurally analogous. At that time as well, Gulf oil-producing states' tankers became targets of attack, and the United States raised its level of involvement by launching escort operations. However, a decisive difference from the current situation lies in the structure of U.S. interests. In the 1980s, the United States was highly dependent on Gulf crude oil and thus had a direct economic motivation to stabilize the strait. Currently, with the oil import ratio having fallen to around 8%[12], intervention is occurring under conditions where the intensity and sustainability of military engagement are heavily governed by calculations of allies' credibility.
4. Key Variables in the Development of the Issue
The first variable is whether the restructuring of Iran's leadership will be completed. EAI assesses that "the likelihood of a phased resumption of negotiations (15-20%) rises only once the election of new Iranian leadership and progress in Pakistan-mediated negotiations are confirmed"[5]. As long as the negotiating counterpart remains unclear, the exchange of military signals is likely to continue serving as a substitute for negotiation.
The second variable is the geographic scope of the escalation. Saudi Arabia's acknowledgment of direct involvement and the attack on the Egyptian port show that the front of conflict is spreading to Gulf littoral states in general[9][11][15]. EAI presents "prolonged deadlock and intermittent flare-ups (45-50%)" as the most likely scenario, identifying as the core pathway a pattern of escalation "spreading across Gulf littoral states including Jordan, Kuwait, and Egypt"[5].
The third variable is the effectiveness of the Saudi-led multilateral security framework. If the maritime defense coalition, which has been proposed to expand to 43 countries, actually functions[5][9], then notwithstanding U.S. pressure to shift its security burden, the primary manager of Gulf navigational safety could shift from sole U.S. management to a joint U.S.-Saudi management framework. EAI expresses this as "the possibility of restructuring into a form of 'joint U.S.-Saudi management'"[5].
The fourth variable is the sensitivity of U.S. domestic politics to inflation. If oil prices surpass $90 per barrel and re-enter the $100 range[14][2], the extent to which the Trump administration can sustain its line of military pressure will be put to the test. The point at which the incentive for "an early return to negotiations," generated by the structure of energy self-sufficiency[12], is actually reflected in policy decisions is likely to serve as the turning point for the next phase of the situation.
III. Scenario Analysis
Escalation of the Full-Scale Iran-Israel-U.S. War: Scenario Analysis
1. Optimistic Scenario (Probability: 15-20%)
This is the case in which the election of new Iranian leadership is concluded at an early stage[5]. The key factor is the adjustment of power between the negotiation faction and the hardline faction within Iran's Supreme National Security Council following Khamenei's death[5][7]. An EAI report diagnoses the conditions for realizing this pathway as follows: "the likelihood of realization increases only once the election of new Iranian leadership and progress in Pakistan-mediated negotiations are confirmed"[5].
Prime Minister Netanyahu's remarks are also linked to this scenario. He predicted that once the conflict with Iran ends, the Strait of Hormuz will lose its geopolitical leverage over energy markets[4]. His concept involves relocating energy pipelines to routes via the Red Sea and Mediterranean, outside the strait[4]. This suggests a policy direction whereby the Israeli government aims to structurally reduce dependence on the strait itself once the war ends.
If this pathway materializes, Brent crude could reverse its surge and stabilize in the $70 range. However, given that Iran's SNSC and military leadership have declared "broader retaliation should the United States continue additional military action or intervention in the Strait of Hormuz"[7], it is judged that the market will continue to price in negotiation risk for a considerable period until an agreement is reached.
2. Base Scenario (Probability: 45-50%)
This is the pathway in which prolonged deadlock and intermittent flare-ups repeat[5]. This is currently the most likely outlook presented by EAI analysis, and is corroborated by the pattern observed of the June ceasefire declaration being followed by the July resumption of the war[2][5]. As long as the structural limitation stemming from the absence of a negotiating counterpart persists, escalation and lulls are likely to repeat periodically[5].
In this phase, Saudi Arabia is concretizing an independent move to distance itself from dependence on the U.S. security umbrella. Saudi Arabia announced that it had formed a maritime defense coalition to secure safe navigation through the Bab el-Mandeb Strait[9]. This is a response to the Houthi rebels declaring a maritime blockade against Saudi Arabia and attacking Saudi tankers and oil facilities[9]. An EAI report understands that this coalition has been proposed to expand "from 14 countries to 43," and characterizes this as "an attempt to build an independent multilateral security framework departing from dependence on the U.S. security umbrella"[5].
Kuwait's vulnerability is particularly highlighted in this scenario. Kuwait is structurally positioned without an alternative route to export crude oil outside Gulf waters[3]. If disruptions to Hormuz transit recur intermittently, Kuwaiti crude exports will suffer direct impact each time[3]. This structure contrasts with Saudi Arabia's and the UAE's ability to utilize alternative pipelines toward the Red Sea.
Within the United States, the transition in energy self-sufficiency structure functions as a variable constraining the sustainability of this deadlock phase. According to EAI analysis, the U.S. share of Gulf crude oil imports plummeted from 25% in 2014 to approximately 8% in 2025[12]. However, a spike in oil prices caused by a Hormuz blockade is directly linked to reigniting inflation and domestic political burden within the United States[12]. This report analyzes that "improved energy self-sufficiency functions not to reinforce strategic patience but to accelerate an early return to negotiations"[12]. In other words, this is a dual structure in which, even as the United States militarily engages in escalation, there remains a persistent possibility of an early return to the negotiating table once the burden of oil prices exceeds a certain level.
In this scenario, Brent crude is expected to fluctuate repeatedly within the $90-100 range. Indeed, immediately following the missile attack on the U.S. military base in Jordan, Brent crude surged approximately 7%, breaking back above $90[14]. Maritime freight rates are also expected to face structural upward pressure amid the simultaneous instability of the two major chokepoints of Hormuz and the Red Sea[2].
3. Pessimistic Scenario (Probability: 25-30%)
This is the pathway in which escalation spreads across Gulf littoral states as a whole and into North Africa. Signs of this are already appearing. Saudi Arabia acknowledged for the first time that it had directly intervened in the war by jointly participating with U.S. forces in strikes against Iran-affiliated militias in Iraq[9][11]. In Egypt, authorities confirmed that a port facility had suffered an explosion presumed to be from a drone attack[9][11]. The Bangkok Post reported this as "the first case in which authorities confirmed that Egypt had come under attack since the war began"[11].
The Carnegie Endowment for International Peace's analysis extends the geographic scope of this spread pathway to the Maghreb[6]. Its assessment is that the ripple effects of the disruption to commercial shipping caused by the blockade of the Strait of Hormuz also place a burden on Morocco and Algeria's green transition plans[6]. This means that the economic shock of the Gulf crisis is expanding into a structure that constrains not only the Middle East region itself but also energy transition policies in North Africa.
Iran has not ruled out the possibility of directly targeting energy infrastructure in this escalation pathway. Oman's Times of Oman reported that the United States and Israel are considering airstrikes on Iranian energy facilities within the coming days to pressure Iran into accepting ceasefire terms[13]. If this plan is carried out, there is a plausibility that the scope of Iran's retaliation could expand beyond blocking the Strait of Hormuz to target Saudi air defenses and Gulf oil-producing states' infrastructure.
If this scenario materializes, Brent crude could rise further beyond $100. An EAI report has already assessed that "additional U.S. strikes on Iran, Iran's tightened control over the Strait of Hormuz, and Houthi attacks on Saudi tankers in the Red Sea have combined to materialize a compound maritime transport crisis in which Brent crude broke above $100 per barrel"[2]. The pessimistic scenario is the pathway in which this breach above $100 becomes not a temporary spike but a long-term entrenched condition.
4. Global Economic and Industrial Impact by Scenario
The gap between scenarios is most pronounced in the energy sector. In the optimistic pathway, along with a downward stabilization of oil prices, LNG spot prices are also expected to settle down. In the base scenario, fluctuations within the $90-100 range make cost forecasting itself difficult for the refining and petrochemical industries. In the pessimistic scenario, entrenchment above $100 inevitably creates a structure in which refining margin pressure and rising costs occur simultaneously.
In the shipping and logistics sector, the common condition of simultaneous instability at the two chokepoints of Hormuz and the Red Sea determines the differing intensity by scenario[2]. EAI's analysis characterizes this as "a pattern in which the three chokepoints of the Red Sea, Hormuz, and Malacca simultaneously become unstable, overlapping structural increases in global shipping freight rates with supply chain shocks"[2]. In the pessimistic scenario, this overlapping effect could extend to a readjustment of transit volume through the Malacca Strait, potentially rippling out across Asian maritime freight rates in general.
The structure of alliance burden-sharing also differs by scenario. The rise in U.S. energy self-sufficiency is a structural factor weakening domestic political legitimacy for protecting Gulf maritime transport routes[12]. An EAI report forecasts that "pressure for burden-sharing contributions and military contributions on energy-import-dependent countries such as the United States, Japan, and the EU is expected to gradually intensify"[12]. This burden-shifting pressure is judged to intensify in both the base and pessimistic scenarios, and the expansion of the Saudi-led maritime defense coalition is interpreted as a regional-level response aimed at filling this gap[5][9].
The implications for Korean companies are derived not so much from the distinction between scenarios but from the exposure structure itself. With a dependence on Middle Eastern crude oil exceeding 70%, Korea is a structurally vulnerable country directly exposed to supply shocks under any scenario[2][12]. If a phase at least as severe as the base scenario persists, cost pressures and rising logistics costs are expected to appear in a compounded manner across the refining, petrochemical, shipping, and manufacturing sectors as a whole, and if the situation shifts into the pessimistic scenario, this shock is likely to become entrenched not as a short-term spike but as a structural cost increase.
IV. Analysis of Response Measures
Escalation of the Full-Scale Iran-Israel-U.S. War: Analysis of Response Measures
1. Response Options for the Optimistic Scenario (Probability: 15-20%)
In a phase where the election of new Iranian leadership and Pakistan-mediated negotiations become visible, Korean companies' response options split into two branches. One is the option of temporarily increasing the proportion of spot purchases of crude oil and LNG. This has the advantage of capturing bargain-buying opportunities in a phase where Brent crude reverses its surge. However, it will take years for the alternative Red Sea-Mediterranean pipeline concept mentioned by Prime Minister Netanyahu to materialize[4]. Entering the spot market before negotiation progress is confirmed could be a premature judgment.
The other option is renegotiating the terms of long-term contracts. Refining and petrochemical companies gain relatively greater bargaining power during this period to introduce oil price ceiling clauses or volume adjustment clauses into long-term supply contracts with Gulf oil-producing states. This is because oil-producing states also want to secure stable demand sources during a phase of war termination. However, given that the likelihood of this scenario itself does not exceed 20%[5], concentrating resources on this option carries considerable risk. During the observation phase of confirming whether a negotiation phase is actually entered, priority should be given to reviewing flexibility clauses in existing contracts rather than new investment.
2. Response Options for the Base Scenario (Probability: 45-50%)
Given that this pathway of prolonged deadlock and intermittent flare-ups is the most likely[5], the center of gravity of response measures should be placed here. The first option is diversified procurement of raw materials in parallel with requesting the release of strategic petroleum reserves. This is a method in which refiners and petrochemical companies avoid concentrating volumes at a particular point in time on a single route or a single supplier. The advantage is that it can limit the scale of exposure each time disruptions to Hormuz transit recur. The disadvantage is that diversified procurement itself raises logistics and management costs. Import volumes from oil-producing states lacking an alternative route outside the Gulf, such as Kuwait[3], should be the first candidates for reduction under this diversification strategy.
The second option is hedging maritime freight rates and extending charter contracts. The situation in which the Saudi-led maritime defense coalition has been proposed to expand from 14 countries to 43[5][9] suggests the possibility that the safety of the Bab el-Mandeb route could be partially managed within a multilateral cooperation framework. Domestic shipping companies need to confirm the scope of route guarantees provided by countries participating in this coalition and extend charter contracts that prioritize the use of that route. However, whether this coalition actually possesses operational escort capability has not yet been verified. It would be risky to overestimate the gap between the announcement of coalition participation and actual execution capability.
The third option is a preemptive response to U.S. burden-shifting pressure. Given that the U.S. share of Gulf crude oil imports has fallen to 8%[12], the possibility that Washington will demand allies share the burden of defending maritime transport routes is structurally increasing[12]. It is advantageous for the Korean government and companies to review in advance the level of participation in multilateral maritime security cooperation. Designing the scope and terms of participation preemptively, rather than responding after burden-sharing demands are actually raised, is a way to secure more negotiating cards.
The fourth option is diversification of non-Middle Eastern supply sources. This corresponds to expanding the proportion of LNG imports sourced from the United States and Australia[2]. The advantage is fundamentally escaping Hormuz risk. The disadvantages are the time required for contract conversion and concerns over damaging relationships with existing Middle Eastern suppliers. Considering the trend of Middle Eastern oil-producing states reconsidering their security dependence on the United States in light of this crisis[5][9], if diversification is pursued too abruptly, it could shrink future channels of cooperation with Middle Eastern countries. It is realistic to approach diversification through a dual-track method that maintains both new non-Middle Eastern contracts and existing Middle Eastern contracts simultaneously.
3. Response Options for the Worsening Scenario (Probability: 30-35%)
If the trend of escalation spreading across Gulf littoral states as a whole becomes entrenched, as evidenced by the attack on the Egyptian port[9][11] and Saudi Arabia's acknowledgment of direct military involvement[9][11][15], the nature of response options must shift from management to defense. The first option is the actual release of strategic petroleum reserves in preparation for a total disruption of Hormuz transit. Given that Korea's dependence on Middle Eastern crude oil exceeds 70%[2][12], if a blockade persists for several weeks or longer, reserves alone would be insufficient to fill the supply gap. The feasibility of this option depends on the scale of the government's reserves and the speed of the release decision. The longer the decision is delayed, the more the cost burden accumulates for refiners.
The second option is adjusting product prices and passing on costs to reflect the surge in maritime freight rates. In a situation where the three chokepoints of the Red Sea, Hormuz, and Bab el-Mandeb become simultaneously unstable[2], the rise in freight rates is not merely a temporary phenomenon. Manufacturers need to accelerate the speed at which they reflect increased logistics costs in product prices. However, since this option could induce a contraction in domestic demand, the scope of application should be differentiated according to each industry's capacity to pass on costs.
The third option is strengthening safety measures for local subsidiaries and personnel in the Gulf region. With attack targets having expanded to include Egypt and Jordan[9][11][15], the physical safety of local Korean company personnel within Gulf oil-producing states emerges as a substantial risk factor. Temporary withdrawal of non-essential personnel and a shift to remote operations should be the priority options for review. This measure is not difficult to implement in itself, but it entails a trade-off between local business continuity and ensuring safety.
The fourth option is early integration into the Saudi-led new order. If the expansion of Saudi Arabia's maritime defense coalition[5][9] becomes entrenched as a regional security framework that supplements or replaces the U.S. security umbrella, countries that do not participate in this framework could be pushed to a lower priority in terms of route guarantees. Korea needs to consider ways to secure priority transit rights by participating early in the Saudi-led multilateral security cooperation. This is also a strategy for integrating into the Middle East security architecture as it is restructured into a jointly managed U.S.-Saudi system[5].
4. Priority Response Measures by Scenario
At present, responding to the base scenario is the top priority. This is because it has the highest probability[5], and the pattern of the June ceasefire declaration being followed by the July resumption of the war has already been confirmed once[2][5]. The refining and petrochemical industries should immediately pursue diversified procurement of raw materials and expanded strategic reserves. The shipping industry should verify the operational capability of the Saudi maritime defense coalition while incorporating risk clauses into charter contract terms.
For the worsening scenario, it is reasonable to establish contingency plans in advance that can be immediately activated at the point of occurrence. Documenting the lines for requesting the release of reserves, criteria for withdrawing local personnel, and triggers for product price adjustments in advance can reduce delays in response when the actual situation unfolds. Since the optimistic scenario has a low probability of occurrence, an observational level of response monitoring negotiation progress is appropriate rather than separate preemptive investment.
The pressure to shift the burden onto allies stemming from the transformation of the United States' energy self-sufficiency structure[12] is a variable that commonly operates across all three scenarios. Responding to this is an item that must be prepared from now, regardless of which scenario branch materializes. The Korean government needs to design in advance the level of participation in multilateral maritime security cooperation and negotiation cards for defense cost-sharing[12].
V. Final Recommended Response Measures
Escalation of the Full-Scale Iran-Israel-U.S. War: Comprehensive Response Measures
1. Comprehensive Judgment and Recommended Response Measures
The essence of the current phase is a structural deadlock stemming from the absence of a negotiating counterpart[5]. As the restructuring of Iran's leadership has been delayed following Khamenei's death, a pattern in which the June ceasefire declaration and the July resumption of the war repeat has become entrenched[2][5]. This pattern will not resolve in the short term. The base scenario presented by EAI's analysis is one of "prolonged deadlock and intermittent flare-ups," which, at a probability of 45-50%, is the most likely[5]. Korean companies must build their response framework on the premise of this probability structure.
The recommended strategy is "Conditional Readiness"[2]. This is an approach of pre-designing response levels for each trigger point rather than immediately embarking on a wholesale restructuring of the supply chain. There are three reasons for this.
First, since structurally vulnerable states of the Kuwait type and states with alternative routes of the Saudi/UAE type are intermixed, the risk gap between oil-producing states is substantial[3]. Kuwait, lacking an alternative coastline outside the Gulf, suffers direct impact each time disruptions to Hormuz recur[3]. In contrast, Saudi Arabia and the UAE have room to utilize alternative pipelines toward the Red Sea[3]. Treating the risk by supplier uniformly leads to misjudgment.
Second, the very motivation for U.S. engagement is weakening[12]. The U.S. share of Gulf crude oil imports fell from 25% in 2014 to approximately 8% in 2025[12]. This means that the United States' direct economic motivation to protect the strait has structurally faded[12]. At the same time, if a Hormuz blockade stimulates inflation within the United States, pressure for an early return to negotiations also grows[12]. While these two forces collide, the level of U.S. engagement is likely to fluctuate in an unpredictable manner. It is risky for Korea to maintain a supply chain design that relies solely on the U.S. security umbrella.
Third, the Saudi-led multilateral maritime defense coalition is emerging as a new axis of order[5][9]. This coalition has been proposed to expand from 14 countries to 43[5]. EAI's analysis views this as a signal that the Middle East security architecture is being restructured in a form of "joint U.S.-Saudi management"[5]. If Korean companies are excluded from this new order, they could be placed at a disadvantage in future navigational safety information and priority transit negotiations.
2. Short-, Medium-, and Long-Term Implementation Plan
Short Term (0-3 Months)
Refining and petrochemical companies should immediately pursue in parallel a request for the release of strategic petroleum reserves and diversified spot procurement of crude oil. An adjustment is needed to prioritize expanding the proportion sourced from Saudi Arabia and the UAE while gradually reducing the proportion sourced from Kuwait[3]. Shipping companies should re-examine renewal terms for war-risk insurance on vessels transiting Hormuz and secure alternative route options near Jordan, Egypt, and Iraq in advance[9][11][15]. As shown by the case of the drone attack on the Egyptian port, the Red Sea-Suez route is no longer a safe zone either[9][11].
LNG trading departments should begin reviewing contracts to diversify spot alternatives to Qatar-dependent volumes toward U.S. and Australian sources[2]. This aligns with the direction presented in a previous EAI report of "diversifying non-Middle Eastern supply sources such as LNG from the United States and Australia"[2].
Medium Term (3-12 Months)
The channel for renegotiating long-term supply contracts should be dualized by Gulf oil-producing state. It is realistic to newly introduce a priority volume allocation clause premised on the use of alternative routes with Saudi Arabia and the UAE, while strengthening a clause for volume adjustment and delay compensation in the event of Hormuz disruption with Kuwait[3]. This negotiation should be conducted intensively at times when oil-producing states have incentive to secure stable demand sources—that is, during localized lulls—in order to maximize bargaining power.
At the government level, there is a need to review whether to participate in the Saudi-led maritime defense coalition[5][9]. If the expansion of participating countries continues, Korea's non-participation could work as a relative disadvantage in terms of information access and navigational priority[5]. The Ministry of Trade, Industry and Energy and the Ministry of Foreign Affairs need to keep open a channel for pre-consulting with the Saudi side on terms of participation and burden-sharing arrangements.
Long Term (12 Months and Beyond)
Work to reduce the Middle East dependence in the structure of energy imports will not be completed in a short period. The current structure, in which dependence on Middle Eastern crude oil exceeds 70%, is the fundamental cause of direct exposure to supply shocks in the event of a Hormuz blockade[2][12]. Securing non-Middle Eastern supply sources and expanding strategic reserves are two axes that must proceed in parallel[2]. Given that pressure to shift burdens from the United States is expected to persist structurally[12], Korea should link its participation in multilateral maritime security cooperation with its own defense cost-sharing negotiations to expand its room for response[12].
3. Monitoring Indicators and Trigger Points
Stage 1 Trigger - Trends in Iranian Leadership: The frequency and tone of official statements from Iran's SNSC and military leadership should be tracked[7]. Whether Pakistan-mediated negotiations resume is a leading indicator for entry into the optimistic scenario[5].
Stage 2 Trigger - Geographic Spread of the Escalation: Whether attacks occur against non-oil-producing Gulf littoral states such as Egypt and Jordan is key[9][11][15]. The drone attack on the Egyptian port is already an instance of this trigger being activated[9][11].
Stage 3 Trigger - Deviation from the Oil Price Band: If Brent crude again exceeds $90 or approaches $100, refiners' margin pressure and a spike in logistics costs will occur simultaneously in Korea[2][14]. In this range, whether to release strategic petroleum reserves should be consulted immediately with the government.
Stage 4 Trigger - Scale of Participation in the Saudi Coalition: Whether the number of countries participating in the maritime defense coalition approaches the target of 43 is an indicator for gauging the pace of restructuring in the Middle East security order[5].
4. Summary Conclusion
This crisis is not a one-off shock but a repeating pattern of escalation and lull rooted in the structural condition of the absence of a negotiating counterpart[5]. Korean companies must distinguish and respond to risk gaps by oil-producing state, while concurrently pursuing independent supply chain diversification premised on the declining reliability of the U.S. security umbrella[3][12]. Whether to integrate into the Saudi-led new order is an area requiring strategic judgment at the government level, and a dual-track response premised on at least 6-18 months of instability is currently the most realistic choice[5][26].
Reporter Kong Hun-eui (huney.kong@gmail.com)
[This is for testing the eligibility review of press release applications.]
References
[3] [MEED (Middle East Economic Digest)] Regional war to have lasting impact on Kuwaiti oil sector
[4] [Haaretz] Netanyahu: Strait of Hormuz will lose energy market leverage after Iran conflict ends
[6] [Carnegie Endowment] From Hormuz to the Maghreb: The Geopolitical Reach of a Gulf Crisis
[9] [Gulf News] US launches 'powerful' retaliatory strikes on Iran; Egypt probes drone-hit port fire
[11] [Bangkok Post] Middle East faces expanded war as Iran and US reignite attacks
[13] [Times of Oman] US, Israel planning to bombard energy-related targets in Iran: Report
[14] [Dünya] Trump Threatened, Prices Soared - Oil at a Critical Threshold Again
[15] [Hürriyet Daily News] Widening Iran-US war pulls in more countries
[16] [Financial Post] US Says It Intercepted Iran Attack, Sending Oil Prices Surging
[19] [Dawn] US says Strait of Hormuz 'remains open'
[21] [Haaretz] 9:00 PM Saudi Arabia announces 14-nation alliance to secure Red Sea shipping
[22] [Al-Monitor] Oil price rises after Iran says it stops ships in Hormuz
[23] [Geo News] Oil price rises after Iran says it stops ships in Strait of Hormuz
[24] [The Irish Times] New front in US-Iran war signalled with drone strike on Egyptian port
[25] [Haaretz] U.S. embassies across Middle East issue warnings, call to 'consider departing'
*This text is an AI translation of an original written in Korean. Some translations or nuances may be inaccurate.
This report is an in-depth analysis planned by an EAI researcher, grounded in sophisticated AI-assisted research, and finalized by the EAI researcher.
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