Korea's Cheongung-II Intercepts 96% of Iranian Missiles, Wins Oil Deal with UAE

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The war between the United States and Iran has entered its fourth week. As the Strait of Hormuz has been effectively blockaded, plunging the world into an oil shortage crisis, the United Arab Emirates has agreed to provide crude oil to South Korea on a priority basis. The reason? Korea's Cheongung-II missile system.

Making its first combat debut in this war, the Cheongung-II intercepted 96% of Iranian missiles fired at the UAE. Its price tag is just one-third that of competing systems. The South China Morning Post (SCMP) assessed that the Cheongung-II matched or in some respects surpassed the performance of the Patriot missile defense system in this real-world engagement.

The Cheongung-II was jointly developed in 2012 by Hanwha Aerospace (012450.KS), Hanwha Systems (272210.KS) and LIG Nex1 (079550.KS) under the leadership of Korea's Agency for Defense Development (ADD). It was created to counter North Korean threats and designed as a medium-range interceptor to replace the aging U.S.-made Hawk surface-to-air missile system used by the Republic of Korea Air Force.

After approximately five years of development, the system was ready for deployment by 2017 and entered mass production in 2018. It was operationally deployed with Korean forces in 2020. The UAE had already received Cheongung-II units before the U.S.-Iran war broke out, and Saudi Arabia and Iraq have also signed purchase contracts. The UAE alone ordered 10 batteries, of which two were delivered first. Each battery includes four launch vehicles carrying eight missiles each, a multi-function radar and a command-and-control center.

SCMP quoted Jang Won-jun, a professor in the Department of Advanced Defense Industry at Jeonbuk National University, as saying, "With growing security concerns in the Middle East over Iran's missile and drone attacks, there are few suppliers other than South Korea capable of delivering air defense systems in a short timeframe." The report added that "strong combat performance has heightened international interest and improved the outlook for Korean defense exports."

The Cheongung-II has a maximum range of approximately 40 kilometers and can intercept targets at altitudes below 15 kilometers. This precisely matches the operating altitude of Iranian ballistic missiles and drones. Often described as "the missile that shoots down missiles," the Cheongung-II is designed to integrate into national air defense networks and is readily interoperable with U.S. and NATO platforms, enabling immediate deployment upon delivery.

Impressed by the Cheongung-II's performance, the UAE requested early delivery of the remaining batteries under its existing 2022 contract, while separately requesting an additional 30 interceptor missiles. The shipment airlifted from Daegu earlier this month was precisely this consignment. The missiles were originally allocated for Korean military use, but Seoul yielded them in consideration of the UAE's emergency situation.

"The urgency of defending against Iran's missile threat prompted South Korea to airlift 30 interceptor missiles to the UAE earlier this month, and the UAE is pressing Korea for the swift delivery of the remaining batteries," SCMP reported.

In return, the UAE promised to supply crude oil to Korea on a top-priority basis. This is the result of "Cheongung-II diplomacy." Korea is set to receive a total of 24 million barrels, including 6 million barrels from existing reserves. This is equivalent to approximately nine days of domestic oil demand.

Over the past four years, South Korea has recorded approximately $55 billion (about 77 trillion won) in defense exports, establishing itself as the world's 10th-largest arms exporter. The Defense Acquisition Program Administration (DAPA) has begun development of a next-generation surface-to-air interceptor system to succeed the Cheongung-II. Approximately 868.8 billion won will be invested in the project, with the goal of completing system development by 2030 under ADD's supervision. Korea has set an official target of becoming the world's fourth-largest arms exporter by 2030. SCMP assessed that this goal moved a step closer after the transport aircraft departed Daegu this month.

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