The Iran-South Korea Joint Chamber of Commerce, in its first strategic report issued in May 2026 under the title "Iran's Position in South Korea's Energy Dependence and the Necessity of Revisiting These Relations Following the Developments in the Strait of Hormuz," examined the effects of the Iran-U.S. war on South Korea's economy. South Korea has repeatedly demonstrated over the past six decades that even in the most difficult domestic and international crises, instead of adopting short-term and contractionary policies, it uses crisis as an opportunity to reform its economic structure, advance technology, and enhance competitiveness. The recent West Asia war and the Strait of Hormuz crisis have been the latest—and perhaps the most serious—test of this model. The Iran-South Korea Joint Chamber of Commerce, within the framework of its mission, continuously monitors, translates, and analyzes the economic policies and strategies of the South Korean government and private sector, so that Iranian economic actors can become familiar with the latest trends in this economy and opportunities for cooperation. The present note, written based on the data released in the recent report of the Iran-South Korea Joint Chamber of Commerce, reviews the set of economic policies announced by the South Korean government from June to July 2026 in response to the West Asia war and beyond, based on official documents from the Ministry of Economy and Finance, the Ministry of Trade, Industry and Energy, the Republic of Korea government portal, and reports from Reuters, Yonhap, and specialized economic media.
Energy Vulnerability and Strategic Response
The Strait of Hormuz crisis exposed South Korea's profound energy vulnerability. As Asia's fourth-largest economy, South Korea imports over 93 percent of its total energy consumption—a ratio consistently above 90 percent since 1995. Its dependence on West Asian crude has actually increased from approximately 61 percent in 2021 to 73.7 percent in 2024, accelerated by Western sanctions on Russian oil. Even more striking is South Korea's reliance on West Asian naphtha, a critical raw material for its petrochemical industry. The Strait of Hormuz serves as the transit route for approximately 25 percent of global seaborne oil trade and nearly 20 percent of global LNG trade, with roughly 84 percent of oil and 83 percent of LNG passing through this chokepoint destined for Asian markets including South Korea.
In response, the South Korean government proactively secured and stored 273 million barrels of crude oil from West Asian producers and alternative supply routes including Kazakhstan. In the naphtha sector, supply was rapidly diversified: the United States (24.7 percent), India (23.2 percent), Algeria (14.5 percent), the United Arab Emirates (10.2 percent), and Greece (4.5 percent) emerged as leading new sources. This rapid diversification demonstrates how strategic planning and swift execution can mitigate even severe supply disruptions.
Paradigm Shift: From Efficiency to Resilience
The most significant transformation in South Korean policymaking has been the fundamental shift from prioritizing economic efficiency to emphasizing "economic resilience"—ensuring continuity of production, exports, and employment even under conditions of war, sanctions, pandemics, or global transportation disruptions. Economic security is now defined as being on par with defense security. This shift has manifested in practical decisions: the establishment of a new ministerial council for integrated management of the "three long-term crises" (inflation, exchange rates, and interest rates); the introduction of "domestic production tax credits" for strategic goods; and—unprecedentedly since the 1997 Asian financial crisis—the imposition of retail price ceilings on gasoline and diesel.
The government has also institutionalized this approach through the "Economic Strategy for the Second Half of 2026" (announced July 5), establishing a "joint market monitoring meeting" and a formal ministerial "macro-financial stability" board comprising the Ministry of Economy and Finance, the Bank of Korea, the Financial Services Commission, and the Financial Supervisory Service. The aim is to control consumer inflation below 3 percent through unprecedented agricultural discounts (1 trillion won budget), stabilization of electricity and gas rates, and increased winter energy subsidies. The won exchange rate, which reached 1,500 won per dollar at the crisis peak, is assessed as reflecting a "temporary crisis premium" rather than a new long-term equilibrium, projected to return to the 1,400 range within one to three years.
Four-Stage Supply Chain Strategy and Mega-Projects
South Korea has introduced a formal four-stage framework for managing strategic goods, assigning distinct policies to each product category: (1) Domestic Production—goods feasible for domestic production to be made independent of imports through tax credits and subsidies; (2) Strategic Stockpile Expansion—adding naphtha and urea to the stockpile list, with a new model where government directly stores and supplies contracted companies, and a dedicated strategic minerals stockpile base under construction in Saemangeum; (3) Diversification and Foreign Investment—pursuing investment in foreign mines and securing priority supply rights through national wealth funds; and (4) Targeted Financial Support—increasing low-interest loan ceilings to 100 percent for goods with over 80 percent dependence on a single country. In critical minerals, the government has prioritized 10 of 33 strategically important minerals and targets increasing the recycling rate from approximately 2 percent to 20 percent by 2030.
Simultaneously, South Korea has unveiled three national mega-projects exceeding 2,000 trillion won (approximately $1.4-1.5 trillion) in total investment. The "3S+1F" strategy (Speed, Stronghold, Spearhead, and Full Support) for the semiconductor industry aims to double memory production capacity within five years. The AI Data Center project targets 18.4 gigawatts of capacity, with Phase One (2029) creating 8.4 gigawatts through SK, GS, and Naver, and Phase Two (2035) expanding to 14.37 gigawatts, capturing approximately 25 percent of the Asia-Pacific market. The Physical AI project, centered on Gumi City, involves Samsung Electronics investing 19 trillion won and LG allocating 9.4 trillion won for AI semiconductor platforms. At the macroeconomic level, South Korea's 2026 economic growth forecast has been revised from 2 percent to 3 percent—the highest in five years—with exports projected to grow nearly 40 percent and monthly exports exceeding $102.25 billion for the first time.
Implications for Iran
South Korea's experience offers valuable lessons for Iranian economic actors. The diversification of naphtha supply signals a restructuring of Korea's petrochemical import market that Iranian exporters should understand. The deepening of Korea's energy cooperation with Saudi Arabia, the UAE, and Kuwait through strategic storage agreements has created a competitive model that merits continuous monitoring. Korea's expanding investment in semiconductors, AI, and data centers increases opportunities for scientific and technological cooperation in non-sanctioned areas such as industrial robotics and automation. Finally, Korea's economic resilience policies—particularly the four-stage framework for strategic goods management—could serve as a model for comparative study in Iran's trade policy and strategic stockpiling. South Korea's experience demonstrates that countries which manage crises while simultaneously planning for the future can transform great challenges into even greater economic opportunities.
