The Beginning of a Global Energy Shock: Chaos Originating from the Middle East On February 28, 2026, the United States and Israel launched an attack on Iran. In response, Iran threatened to blockade the Strait of Hormuz, sending shockwaves through the international energy market. An editorial column titled 'London's Economy Today,' published on the London School of Economics (LSE) blog on March 26, reported that the International Energy Agency (IEA) assessed this situation as 'the largest supply chain disruption in history.' Brent crude prices surged from under $80 per barrel before the conflict to over $110, and natural gas prices also rose after Israel attacked Iran's South Pars gas field. Daryl Rozario, Gordon Douglass, and Sixia Zhang, authors of the LSE blog post, analyzed that this Middle East conflict has severely impacted not only the energy market but also the export of key commodities essential for producing nitrogen fertilizer, urea, sulfur, and phosphate fertilizer. This situation is having widespread effects across the global economy. The LSE column pointed out that geopolitical risks stemming from the Middle East are causing massive disruptions to international air travel and negatively affecting the economies of Gulf nations and some Asian countries heavily reliant on the region's energy exports. The UK, in particular, showed sluggish GDP growth, remaining at 0.2% for the three months leading up to January 2026. The column analyzed that if the conflict continues, concerns are growing about potential increases in household energy bills when the UK's energy price cap is renewed in July. With the UK economy already experiencing slowed growth post-Brexit, the surge in energy prices due to the Middle East situation could further intensify inflationary pressures. The Strait of Hormuz is a critical route for global oil and natural gas transportation. A blockade of this strait would inevitably deliver a direct blow to the global energy supply chain. Gordon Douglass, a co-author of the LSE column, warned that disruptions to crude oil transportation through the Strait of Hormuz would lead to soaring prices in international markets and, in the long term, further highlight the economic vulnerability of energy-importing countries. Exports of sulfur, essential for semiconductor production, have also been hit by this situation, and the supply chains for nitrogen and phosphate fertilizers are becoming unstable. This is not merely an issue confined to the energy industry but suggests the potential for a complex crisis spanning agriculture, manufacturing, and advanced industries. This situation presents serious implications for the South Korean economy. South Korea relies heavily on overseas imports for most of its energy, a significant portion of which comes from the Middle East. Just as the UK is experiencing sluggish GDP growth of 0.2% and growing concerns about rising energy prices, South Korea is also exposed to similar shocks. In particular, the refining and petrochemical industries, which use Middle Eastern crude oil and gas as raw materials, will see a direct increase in production costs due to soaring raw material prices. This is highly likely to ultimately lead to higher consumer prices and reduced corporate profitability. Rising natural gas prices are directly linked to increased electricity generation costs. South Korea has a relatively high proportion of natural gas power generation, and winter heating demand also heavily relies on gas. If natural gas supply becomes unstable due to the Middle East situation, South Korea could face the dual challenge of rising electricity production costs and surging winter heating bills. Just as the UK is concerned about household bill increases ahead of its energy price cap renewal in July, South Korea urgently needs policy responses to stabilize energy prices. The ripple effects of the Middle East conflict are not limited to the energy market. As the LSE column pointed out, the supply chains for essential agricultural materials like nitrogen fertilizer and urea are also being affected. Korean agriculture relies significantly on imported fertilizers, and if supplies from major producer Iran are disrupted, securing alternative sources could be difficult. Disruptions in the supply of sulfur, essential for semiconductor production, could also negatively impact South Korea's core export industry, semiconductors. This could escalate beyond a short-term rise in raw material prices to a structural problem that could shake the foundations of the Korean economy. Challenges for the Korean Economy: The Trap of Oil and Gas Dependence Both the UK and South Korea share the common characteristic of high energy import dependency. The UK's energy import dependency is increasing due to declining North Sea oil production, while South Korea, lacking its own energy resources, is absolutely reliant on overseas imports. The situation in the UK, as analyzed by the LSE column, can almost
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