Middle East tensions expose Korea’s supply weaknesses

The conflict involving the United States, Israel, and Iran has laid bare South Korea’s heavy reliance on Middle Eastern energy and raw materials, exposing significant weaknesses in the country’s supply chains. When the Strait of Hormuz was blocked, deliveries of crude oil, naphtha, urea, and aluminum were disrupted, putting the broader economy at risk. Analysts say the crisis underscores the need to restructure overseas supply networks to strengthen both economic resilience and national security.

Approximately 70 percent of South Korea’s crude oil imports come from the Middle East, primarily Saudi Arabia. U.S. oil imports have increased over the past nine years, making the United States the second-largest supplier after the Netherlands, but these imports account for less than 20 percent of the total. Crude from Vietnam, Malaysia, and other countries represents roughly 10 percent. Most domestic refineries and petrochemical plants are optimized for heavier Middle Eastern crude, making a rapid shift to lighter grades technically challenging.

To stabilize soaring global oil prices, the United States and the European Union temporarily eased sanctions on Russian crude, but South Korea has limited room to maneuver. Countries including China, India, and Southeast Asian nations continued buying Russian oil during the sanctions period. Even the pro-U.S. Philippines, which declared a national emergency due to supply disruptions, imported Russian crude. South Korea has largely refrained from entering the market to avoid straining ties with Washington.

Experts say South Korea must diversify its supply chains beyond specific regions and product types to compete in the global energy and raw materials market. Alternative suppliers with different shipping routes need to be secured over the medium to long term, even at higher costs. Since the outbreak of conflict in the Middle East, Canadian heavy crude, Egyptian naphtha, and Vietnamese urea have become difficult to obtain, even at premium prices.

Stable access to energy and raw materials is essential for South Korea to maintain its position as a leading global manufacturing hub. Analysts warn that the disrupted supply chains may take months or years to fully recover. Prolonged shortages of Middle Eastern helium and bromine could also affect the semiconductor industry, a cornerstone of the Korean economy. The government is expected to support corporate efforts to diversify imports, ensuring supply chain stability critical to both economic security and national defense.