While dining with a Korean corporate expatriate in an affluent residential area of New Jersey recently, I found myself looking around the restaurant as we discussed the Middle East situation. This was before the ceasefire agreement, and we were earnestly exchanging worries about President Donald Trump's threats to strike Iranian energy facilities and a prolonged closure of the Strait of Hormuz. Strangely, every American face I observed looked relaxed and serene, as if no war had ever broken out. At that very hour, people in the Middle East were living in fear for their lives under a hail of missiles. The scene from the film "Parasite" flashed through my mind — where a family in a semi-basement home in the lower part of town is thrown into chaos by flooding during a heavy rainstorm, while a wealthy family in the upper part of town casually enjoys "jjapaguri" noodles. The expatriate sitting across from me remarked bitterly, "I hear Korea is even implementing a five-day car rationing system to save on fuel."
The United States is an unmistakable party to the Iran war, yet the sense of war on the ground here is remarkably faint. The battlefield is far from the mainland, and apart from gasoline prices rising by just over one dollar per gallon, the tangible economic shock is minimal. Indeed, the Federal Reserve, in its April Beige Book report on economic conditions, assessed that prices excluding energy were "rising moderately," while employment was "stable or slightly increased." Treasury Secretary Scott Bessent went so far as to boast that "core inflation, excluding energy and food, is declining." In America, the suffering of the Middle East, where people are dying, and of other countries struggling with energy shortages, is a concern shared only by a small elite.
Major U.S. banks including JPMorgan, Goldman Sachs, Morgan Stanley, and Citi, on the contrary, posted record profits as trading volumes surged due to the war. The S&P 500 and Nasdaq Composite indexes also hit all-time highs, as if mocking the uncertainty of war. On May 23, and on June 7 and 17, crude oil futures trading spiked just before Trump and Iran issued their messages. Large sums of Middle Eastern capital also flowed into the private equity firm run by Jared Kushner, Trump's eldest son-in-law, who leads Iran diplomacy. Defense Secretary Pete Hegseth, meanwhile, reportedly explored the possibility of investing in a defense industry exchange-traded fund (ETF) shortly before the war.
As a nation, the U.S. is also sharply increasing crude oil exports, taking advantage of the blocked Strait of Hormuz. It is even considering demanding that China import American crude oil at next month's U.S.-China summit. The International Monetary Fund (IMF) has likewise raised its forecast for U.S. economic growth next year to 2.1 percent from 2.0 percent, citing America's status as a net energy exporter. On top of that, the U.S. could secure enormous concessions in the Middle East through post-war negotiations. In other words, it has ample means to offset its current economic burdens, such as military spending.
Korea, by contrast, has been saddled with a triple burden of high oil prices, a high exchange rate, and high inflation from a war in which it had no say. Given its heavy dependence on Middle Eastern energy, its petrochemical industry, which is based on naphtha, was immediately shaken, and its financial markets swung at levels among the most volatile in the world. Diplomatically, Korea has been met only with harsh words from Trump for not dispatching warships. Nor is there any clear way to recoup its losses once the war ends. The Center for Strategic and International Studies (CSIS), a U.S. think tank, has delivered the painful assessment that "among non-combatant nations, the biggest victim is Korea."
What is even more frustrating is that high oil prices and supply chain instability are likely to persist for some time even after the war ends. This geopolitical crisis could further widen the gap between nations that live in mansions stocked with abundant resources and those struggling in the confines of a semi-basement.
Still, this story must not end in tragedy like the film "Parasite." Japan, Europe, and others are equally aggrieved by the war America has started. Korea must turn this crisis into a cautionary lesson and create new opportunities by diversifying its energy sources, expanding defense exports, and participating in Middle East reconstruction projects. The time to put our heads together is right now, just as discussions on ending the war begin in earnest.
