Seoul stocks slide, won weakens as oil prices climb amid Middle East tensions
Stock and currency markets in Seoul fell on March 13 as investors grew wary of a prolonged regional conflict and its impact on energy prices.
The Kospi, Korea’s main equity index, opened down 170.86 points, or 3.06%, at 5,412.39. The tech-heavy Kosdaq also slid, opening 26.12 points lower, 2.27% to 1,122.28. The early session reflected a broad risk-off mood driven by heightened Middle East tensions and higher oil costs.
The won weakened against the dollar as global energy prices surged. The Korea Exchange’s foreign exchange rate closed at 1,493.7 won per dollar at 3:30 p.m., up 12.5 won from the previous day, after trading in the 1,480s earlier in the day. The move underscored ongoing pressure from higher crude prices and external market volatility.
Korea relies heavily on Middle East crude, so rising oil prices tend to push up import costs and weigh on the won. Analysts said the stronger dollar and increased energy costs are likely to sustain a weak won trajectory in the near term, translating into broader inflation pressures at home.
Even as plans were announced to release strategic petroleum reserves to cushion potential supply disruptions, fears persisted that Iran’s actions could keep the Hormuz Strait, a vital oil chokepoint, closed or constrained for longer than expected. Such scenarios threaten global oil supply more broadly and can feed into worldwide price pressures.
Mun Jung-hee, a researcher at KB Kookmin Bank, cautioned that the market could remain choppy. She noted that the open around 1,490 won per dollar would be followed by adjustments in domestic shares and continued selling by foreign investors, along with ongoing selling of government bond futures. The combined effects of higher oil costs, a rising dollar, and external stock volatility were expected to keep sentiment subdued.
For U.S. readers, the development matters beyond Korea because oil prices and exchange-rate moves quickly influence global inflation, monetary policy, and financial markets. Korea is a major supplier of semiconductors and other high-tech components, so a pause or slowdown in its market can ripple through global supply chains and affect American manufacturers and investors. Geopolitical risk in the Persian Gulf area can also shape energy prices and market risk appetite worldwide.
The Hormuz Strait sits between Iran and the United Arab Emirates, linking the Persian Gulf with the Gulf of Oman. It handles a substantial share of global crude shipments, and disruptions there can push oil prices higher, impacting not only energy costs but also inflation expectations and policy decisions in major economies, including the United States.