Iran Conflict Disrupts Global Oil Markets
The ongoing war in Iran has caused significant disruptions in global oil markets, sharply increasing prices due to the effective closure of the Strait of Hormuz, through which over 80% of oil and LNG shipments to Asia transit. Approximately 95% of Japan’s oil and 70-75% of South Korea’s oil rely on this critical chokepoint, leading to substantial economic impacts in these countries.
In response to the crisis, Japan and South Korea have begun releasing strategic oil reserves as their stock markets face major declines—South Korea’s Kospi index has fallen about 10% since the conflict commenced. Japan’s market dynamics are similarly strained, as oil prices surge due to supply shortages. The swift changes in energy access and ongoing market uncertainty underscore the conflict’s broader implications.
