South Korea faces oil price risk as IEA taps emergency stocks.
Oil prices climbed above $100 a barrel again, as the market grappled with the impact of the IEA’s decision to release emergency oil stocks and with signs that the US–Iran confrontation could endure. Brent crude for May delivery surged intraday past $101.50, before settling in the mid-$90s in late trading in Korean time. U.S. West Texas Intermediate also spiked intraday to about $96 per barrel, with Brent and WTI closing the prior session up around 4.8% and 4.6%, respectively.
The tension is linked to Iran’s widening attack footprint around the Hormuz Strait into the Persian Gulf and Iraqi waters. The Islamic Revolutionary Guard Corps warned that energy prices could not be artificially propped up and warned that prices could reach around $200 per barrel if the conflict persists.
On November 11, the International Energy Agency announced that its 32 member countries would release a total of 400 million barrels of emergency stockpiles—a scale more than double the 2022 response during Russia’s invasion of Ukraine. Market observers question whether releases spread over two to three months can stabilize prices, with some noting the impact may be limited by the duration of supply disruption.
Financial markets were volatile, with demand for safe assets rising and the dollar strengthening. The dollar index gained about 0.43% from the previous day, while the won weakened against the greenback, finishing at 1,481.2 won per dollar, roughly 14.7 won weaker than the day before.
Analysts warned that the market’s trajectory hinges on how long the Hormuz disruption lasts. Cho Young-Gu, a researcher at Shin Young Securities, said that if the conflict continues with intermittent strikes but the blockade of Hormuz lasts four to six weeks, international oil prices could rise only modestly on an annual basis, around $80 per barrel on average, though with downward pressure on Korea’s growth and upward pressure on inflation.
A longer-lasting high-price environment could affect different economies in divergent ways. The Wall Street Journal noted that China’s large strategic petroleum reserve and heavy investment in renewables could leave it relatively better positioned, while Russia might also benefit somewhat as a new source of demand. Gulf Cooperation Council countries could suffer economically from export constraints, production cuts, and the tourism downturn in the Middle East.
For South Korea, the vulnerability is acute: roughly 70% of total oil imports come from the Middle East, making the economy sensitive to sustained price spikes. Ju-won of Hyundai Research Institute cautioned that securing a stable crude and commodity supply should be a priority, and that long-term independence from oil would require structural shifts in Korea’s economy and industries.