South Korea president says economy on 'wartime footing' over Iran war

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SEOUL: South Korea has placed its economy on a ’wartime footing’ as the escalating conflict between the United States and Iran disrupts global energy markets and threatens national security. President Lee Jae-myung announced the emergency stance during a high-level cabinet meeting, stating that the nation must prepare for a prolonged period of economic instability and potential supply chain collapses.

The President’s directive comes as the Strait of Hormuz, the world’s most vital oil artery, remains a focal point of military tension. Seoul has declared a red alert for its energy supply chain, as the nation currently relies on the Middle East for over 70% of its crude oil imports. President Lee emphasised that every administrative resource will be mobilised to protect the livelihoods of citizens and the stability of the industrial sector.

The South Korean government has convened emergency meetings to address soaring domestic fuel prices and potential shortages. Finance Minister Choi Sang-mok warned that the risk of a prolonged supply disruption is at its highest level in decades, prompting the administration to consider a further release from the national strategic petroleum reserve. While the South Korean won has plummeted to a two year low against the dollar, the manufacturing sector, particularly semiconductors and automobiles, is bracing for increased production costs. Analysts suggest that if the Hormuz blockade persists, South Korea’s GDP growth for 2026 could be slashed by as much as 1.5%.

Photo Credits: AFP