Prolonged tensions in the Middle East, including the blockade of the Strait of Hormuz following U.S. and Israeli airstrikes on Iran, are now inflicting tangible damage across Korean industries. A "domino effect of disruptions" is materializing as petrochemical companies face raw material procurement obstacles and shipping lines suspend Middle East routes.
According to industry sources on the 11th, Lotte Chemical (011170) and LG Chem (051910) recently notified customers of potential force majeure declarations for certain products. The companies informed clients through official letters that Iran's blockade of the Strait of Hormuz has made it impossible to secure critical raw materials and transportation. Both companies clarified that "this is not yet a force majeure declaration but a notification of its possibility," while acknowledging the situation is urgent enough to raise concerns about supply delays.
Following Yeochun NCC's earlier force majeure declaration—the first in the domestic industry—major petrochemical firms are now signaling supply disruptions, making production slowdowns across industries inevitable. South Korea relies on the Middle East for more than half of its imported naphtha, creating severe constraints on production of basic chemicals such as ethylene.
The shipping industry is also taking a direct hit. HMM (011200) sent a letter to customers announcing a complete suspension of cargo transport on Middle East routes, including the Arabian Gulf, Red Sea, and East African waters. New bookings have also been temporarily halted. For cargo already in transit, the company will reroute to safe alternative ports while charging an additional $1,000 per container.
"With virtually no vessels able to pass through the Strait of Hormuz, accepting bookings is meaningless," HMM explained. "We cannot operate as the safety of ships, crew, and cargo in the Middle East region cannot be guaranteed."
The aviation industry is not immune. Korean Air (003490) extended the suspension of its Incheon-Dubai route through the 28th after Dubai airport authorities notified an additional extension of the flight ban. As the only Korean carrier operating Middle East routes, a prolonged crisis will inevitably result in route revenue losses and gaps in passenger and cargo demand for the region.
As geopolitical risks emanating from the Middle East translate into real economic shocks through logistics paralysis and production disruptions, a sense of crisis is mounting across industries. With both shipping and air routes simultaneously suspended and logistics severely impacted, warnings are emerging that additional oil price pressures could transmit cost shocks across materials, components, and energy to both manufacturers and consumer prices.
