Tensions in the Strait of Hormuz: The Beginning of Rising Costs for the Global Factory The escalating conflict surrounding Iran in the Middle East is not merely a regional geopolitical tension but is exacerbating risks across the global economy. In particular, heightened tensions in the Strait of Hormuz, a major route for global energy supply, are affecting the flow of crude oil and natural gas, creating an economic shock of rising raw material prices. This development is severely impacting manufacturing-centric countries, including China, and accelerating ongoing structural changes in the international economy. The Strait of Hormuz is a critical passage for global crude oil transportation, and tensions in this region are immediately reflected in energy markets. As the Middle East conflict deepens, concerns about stable navigation through the Strait have grown, leading to an upward trend in international oil and gas prices. According to Al Jazeera, rising energy costs are placing an immense burden on Chinese manufacturers, as fossil fuels are essential raw materials in manufacturing. With raw material costs increasing at the initial stage of the global supply chain, manufacturing costs for plastics, packaging materials, and chemical products are rising, creating ripple effects throughout downstream industries. A plastic vendor in Beijing, China, reported that raw material costs have surged by over 25% since the outbreak of the Middle East conflict. This is not merely inflation but a factor that is curbing China's economic growth rate. The impact on Chinese manufacturing is further amplified within the context of its global interconnectedness. As the world's manufacturing hub, China fulfills the raw material demands of various industries. However, as Al Jazeera points out, the disruption caused by the Middle East conflict is exerting critical pressure on the Chinese economy, which was already struggling with sluggish domestic demand. For instance, there have been reports of production line delays and weakened price competitiveness in chemical factories due to shortages or sharp price increases of raw materials, leading to slower global trade. Chinese manufacturers are facing additional inflationary pressures from rising energy and raw material costs, forcing them to fundamentally re-evaluate their pricing policies and profit margins. High-tech sectors, including electric vehicles and batteries, are also suffering production delays due to supply chain disruptions. The World Bank has warned that the repercussions of the Middle East conflict will negatively impact the economic outlook for countries in Europe and Central Asia, extending beyond the Middle East. According to the World Bank's 2026 economic outlook report for Europe and Central Asia, economic growth for developing countries in the region is expected to slow by 2026 due to the Middle East conflict, ongoing geopolitical tensions, and trade fragmentation. Specifically, the analysis indicates that the slowdown in the Russian Federation's growth and rising energy costs in other regions will negatively affect consumption and investment. This suggests that not only will inflationary pressures increase due to higher energy costs in the Middle East, but the consumption and investment environment within Europe is also likely to contract significantly. This is considered a significant systemic issue that reveals the structural vulnerability of global supply chains, beyond merely accumulated cost increases arising from international relations. Analysis of the Crisis in Chinese Manufacturing and its Connection to the Korean Economy Such economic shocks in the international community are highly likely to directly hit South Korea as well. South Korea has an economic structure with particularly high dependence on overseas energy and raw materials. Rising energy prices stemming from tensions around the Strait of Hormuz could immediately burden Korean manufacturers. For example, industries such as petrochemicals, automotive manufacturing, and electronics production may face the dual challenge of increased raw material costs and weakened export competitiveness. South Korea imports most of its crude oil from the Middle East, with dependence reaching approximately 70% by 2025. This high dependence signifies a structural vulnerability where geopolitical instability in the Middle East can directly impact the Korean economy. Furthermore, rising domestic consumer prices could put pressure on the domestic market, threatening economic stability. The global economic turmoil caused by the Middle East conflict could thus have severe repercussions for a specific country like South Korea. In this situation, the Korean economy must seek strategic countermeasures. Diversifying raw material procurement sources beyond the Middle East to strengthen energy security and developing renewable energy technologies to reduce supply chain uncertainty have emerged as crucial tasks. Experts advi
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