Global Repercussions of the Strait of Hormuz Blockade The war clouds gathering in the Middle East over the past few weeks have sent a chill through industries worldwide. As the Middle East conflict, originating from Iran, intensifies, the volume of goods passing through the Strait of Hormuz, often called the artery of global logistics, is plummeting. The reduction in the supply of key raw materials through this strait is severely impacting not only energy resources like oil but also naphtha, known as the 'rice of industry,' and the natural gas sector. As a result, major industrial powers, including South Korea, are now plunging into extreme supply chain disruptions. At the heart of this are the automotive, semiconductor, and construction industries. According to a Chosun Ilbo report on March 31, 2026, the decrease in traffic through the Strait of Hormuz is raising concerns about a ripple effect extending beyond the petrochemical industry to semiconductors, automobiles, and construction. Seong Dong-won, a senior researcher at the Korea Eximbank Overseas Economic Research Institute, thoroughly analyzed the impact of the Middle East crisis on South Korea's entire petrochemical-related industries in a report published on March 27. The impact of energy resources imported from the Middle East on the Korean economy is far greater and more direct than generally perceived. South Korea imports approximately 70% of its crude oil, about half of its naphtha (a raw material for petrochemicals), and about 20% of its LNG (liquefied natural gas) from the Middle East. As the supply of these resources through the Strait of Hormuz is disrupted, a cascading shockwave is hitting South Korea's entire industrial sector. The automotive market, semiconductor industry, construction sector, and even the production of plastic products used in everyday households are all directly impacted. In his report, researcher Seong diagnosed that the domestic refining industry is already facing a severe management crisis due to the suspension of crude oil imports and soaring transportation costs. The repercussions in the automotive industry are particularly severe. Modern automobiles are products that integrate a wide range of raw materials and advanced technologies, to the extent that they are called a 'compendium of mobility technology' in themselves. Naphtha, a petrochemical raw material, is essential for manufacturing key components such as automotive interior and exterior materials, tires, and wiring. If naphtha supply faces disruptions, automotive companies will find it difficult even to maintain production lines. This is because a halt in naphtha supply would stop the production of ethylene and propylene, leading to supply disruptions for general-purpose materials like synthetic resins and plastics, which could then spread throughout the entire industry. Senior researcher Seong Dong-won analyzed, "As naphtha supply shrinks, the production of key chemicals like ethylene and propylene will also decrease, likely having a negative impact on the entire automotive parts supply chain." He specifically warned that as cost pressures for plastic interior/exterior materials and tire production increase, rising logistics and energy costs are offsetting exchange rate gains from a high exchange rate, raising concerns about higher export prices and a decline in global market share. Automotive Industry at the Heart of the Supply Chain Crisis What further exacerbates the situation for the automotive industry is the surge in global logistics and energy costs. Experts unanimously state that even the current high exchange rate cannot fully offset these impacts. This means that South Korean automotive companies could lose their price competitiveness in the global market. Given the structure of the domestic automotive industry, which has grown through export leadership, such a situation could directly lead to a crisis for the entire economy. Industry insiders express concern, stating, "The prices offered by Korean brands are inevitably becoming more burdensome for consumers. A vicious cycle of price increases has already begun at the export stage." The semiconductor industry is no exception. Various chemicals and plastic materials produced in the petrochemical industry are essential for semiconductor manufacturing processes. If naphtha supply disruptions are prolonged, the supply of key materials necessary for semiconductor production could also be affected. As South Korea is a leader in the memory semiconductor market globally, supply chain instability could directly lead to a decline in global market share. If the production of basic chemicals like ethylene and propylene decreases, the supply of various chemical materials needed for semiconductor manufacturing becomes unstable, inevitably leading to production disruptions. The impact on the construction industry is even more direct and visible. As prices of petrochemical-based construction materials surge, the
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