KOSPI -7%, Exchange Rate ₩1,480, 70% of Oil from Middle East: 5 Reasons PM Kim Min-seok Holds Emergency Meetings Every Day at 5 PM
With the U.S.-Israel airstrikes on Iran and the Hormuz Strait blockade becoming a reality, the KOSPI plunged more than 7% in a single day on March 3 (closing at 5,791 points) and the won-dollar exchange rate surged to the ₩1,480 range. Prime Minister Kim Min-seok, filling the leadership vacuum during President Lee's overseas trip, is chairing daily emergency briefings at 5 PM to oversee energy, finance, and overseas Korean citizen protection.
Why you need to read this now: The Hormuz Strait — through which 70% of Korea's crude oil and 20% of its LNG pass — is facing a blockade crisis, triggering a historic KOSPI collapse. The Iran situation is not just a geopolitical issue; it is an economic state of emergency directly affecting South Korea's energy, finance, and daily life.
TL;DR
- March 1, 2026: U.S.-Israel airstrikes on Iran → Iranian Supreme Leader killed → Iran declares Hormuz Strait blockade
- March 3: KOSPI plunges 7%, closes at 5,791.91 (Samsung Electronics -9.88%, SK Hynix -11.5%)
- Won-dollar exchange rate breaks through ₩1,480, with possibility of hitting ₩1,500 if prolonged
- Korea relies on Middle East for 70% of crude oil and 20% of LNG → direct hit from Hormuz blockade
- PM Kim Min-seok: chairing daily 5 PM emergency comprehensive review meetings during the President's overseas trip
1. The Facts: What Happened
Starting February 28, 2026, the U.S. and Israel launched airstrikes on Iran. Iranian Supreme Leader Khamenei was killed, and Iran declared a blockade of the Hormuz Strait as retaliation, sending global energy markets into turmoil.
Key Data:
| Indicator | Figure (as of March 3, 2026) |
|---|---|
| KOSPI closing price | 5,791.91 (-7.09%) |
| Won-dollar exchange rate | ₩1,480 range |
| Brent crude futures | $77.74 per barrel (+6.7%) |
| LNG JKM | $15.07 per MMBtu (approx. +40%) |
| Foreign net selling | ₩5.1603 trillion (single trading day) |
2. Why Korea Is Particularly Vulnerable: The Transmission Mechanism
The Energy Dependency Trap
Korea imports more than 70% of its crude oil from the Middle East, and 20% of its LNG also transits the Middle East. If the Hormuz Strait — through which 20–30% of the world's seaborne oil shipments pass — is blocked, using alternative routes would cause shipping freight rates to surge 50–80%.
KOSPI Singled Out as the 'Weak Link'
While U.S. and European markets fell only 2–3%, KOSPI dropped more than 7% for several reasons:
- Foreign investors net selling for 9 consecutive trading days (estimated daily average of ₩500 billion)
- Market structure heavily weighted toward energy-intensive manufacturing companies like Samsung Electronics and Hyundai Motor
- High valuation pressure built up from a 44.89% gain since the start of the year
Overseas Korean Nationals at Risk
Approximately 21,000 Koreans are currently in the Middle East. Evacuation of field workers and expatriates in countries bordering Iran has become a real concern.
3. Context & Background: PM Kim Min-seok's Crisis Management
With President Lee Jae-myung on a state visit to the Philippines, Prime Minister Kim Min-seok is serving as the de facto control tower for economic security.
The Prime Minister's Office Five-Pillar Response:
- Protection of overseas Koreans — Confirming safety of Koreans in the Middle East and supporting repatriation
- Strengthening security readiness — 24-hour monitoring by military and intelligence agencies
- Minimizing economic fallout — Securing alternative energy supply sources and responding to surging oil prices
- Preventing public anxiety — Releasing meeting results immediately after each daily session
- Staged scenario response — Developing multiple scenarios for escalation and prolonged conflict
The Financial Supervisory Service (FSS) has activated a 24-hour emergency response task force to contain the spread of market instability.
4. Outlook: How Long Will This Last?
Short-term (1–2 weeks) scenario:
Hana Securities has analyzed that the KOSPI could correct to as low as the 5,670 level. However, if the conflict does not prolong, it may conclude as a short-term shock. Reference: The June 2025 Israel-Iran strike lasted approximately two weeks until the ceasefire.
Medium-to-long-term risks:
- Prolonged Hormuz blockade → oil price forecast of $100 per barrel
- With no apparent successor following Khamenei's death, Iran's internal power vacuum could prolong the blockade
- Stagflation scenario: rising energy prices + slowing global demand
Benefiting sectors: Shipbuilding (Hanwha Aerospace +16%), defense, shipping
Hurt sectors: Aviation, automotive, semiconductors, petrochemicals
5. Checklist: What You Should Do Now
Reference Links
- KOSPI 7% Plunge Analysis — Seoul Economy
- Korea's 70% Crude Oil & 20% LNG Middle East Dependence — Yonhap News
- Hormuz Blockade Becomes Reality — Herald Economy
- PM Kim Min-seok Emergency Meeting — Newsis
- Iran Crisis KOSPI Short-Term Strategy — Opinion News
Image credit: Wikimedia Commons — Persian Gulf / Hormuz Strait map (Public Domain)