Supply chains reshape global power dynamics

The closure of the Strait of Hormuz has sent shockwaves through the global economy. When Iran first warned it could block the waterway, many dismissed it as familiar rhetoric. Even at the height of Iran-Iraq tensions in the 1980s, the strait remained open, and markets showed little sign of concern.

This time, the disruption was real. One of the world’s most critical energy corridors was cut off, and the impact was immediate. Oil supplies tightened, driving global prices higher. Naphtha and ethylene, key industrial feedstocks, began to dwindle, putting pressure on petrochemicals and plastics. The strain quickly spread to downstream industries such as autos and shipbuilding. The episode underscored how a single disruption can cascade through an interconnected industrial system.

The fallout extended beyond energy. With major shipping routes constrained, South Korea’s export-dependent economy faced mounting pressure. Companies were forced to reroute cargo around the Cape of Good Hope to avoid the Strait of Hormuz and the Red Sea. The detours lengthened transit times, raised costs and increased uncertainty over delivery schedules and contracts. The strain began to weigh on the export system itself.

The crisis points to a broader shift. Supply chains are increasingly being used as strategic leverage. China’s move last year to tighten rare earth exports, targeting materials essential to advanced manufacturing, signaled the trend. Iran’s blockade has reinforced it, using control over a critical transit route to strengthen its position in negotiations with the United States. Access to essential resources has become a powerful instrument of statecraft.

More concerning is that this dynamic may outlast the current conflict. As countries recognize the leverage embedded in supply chains, a return to earlier norms appears unlikely. International observers already describe Iran as joining a group of states that strategically exploit economic choke points. More countries may follow, adding to global uncertainty.

For South Korea, the challenge is structural. The country depends heavily on imported energy, raw materials and global logistics networks, leaving it exposed to external shocks. The question is what leverage it can offer in return. Are there sectors where other economies cannot easily substitute South Korea?

There are clear strengths, including global leadership in memory semiconductors and a growing presence in defense exports. Still, those advantages may not be enough. Without securing a position as an indispensable link in key supply chains, the country risks facing similar disruptions in future crises. Conflicts may ease, but the strategic use of supply chains is likely to persist. The choice is whether to remain vulnerable or to build the resilience and leverage needed to withstand future shocks.