Amid disruptions to crude oil, gas, and exports due to the Middle East war, advice has emerged that the South Korean government should participate in major countries' new logistics network initiatives connecting India, the Middle East, and Europe. While expectations are rising that logistics bottlenecks may ease after the United States and Iran agreed to a two-week ceasefire on the condition of opening the Strait of Hormuz, experts argue that new logistics networks must be established in advance given the recurring nature of Middle East crises.
The Korea Institute for Industrial Economics and Trade (KIET) published a report titled "The U.S.-Iran Conflict and the Possibility of Global Logistics Route Reorganization" on the 8th containing these findings.
The report first diagnosed that the three major maritime choke points in the Middle East — the Strait of Hormuz, the Bab el-Mandeb Strait, and the Suez Canal — pose structural risks to South Korea. These chokepoints were originally designed with efficiency in mind, but with the development of asymmetric weapons capable of low-cost, sporadic attacks, a pattern has emerged where even localized attacks can cause global supply chain disruptions.
Gil Eun-seon, a research fellow at KIET, emphasized, "The Middle East in particular has three maritime logistics chokepoints concentrated in close proximity, creating the risk that a single conflict can simultaneously threaten multiple bottlenecks. Therefore, the current U.S.-Iran conflict should serve as an opportunity to go beyond short-term oil price shocks and short-term energy supply chain responses, and to also examine the need for alternative logistics routes and supply chain redesign in preparation for recurring geopolitical shocks."
Accordingly, Research Fellow Gil recommended that South Korea should join efforts to establish new multilateral, open logistics networks. The representative new logistics network is the "IMEC" (India-Middle East-Europe Economic Corridor) plan, announced at the 2023 G20 New Delhi Summit. IMEC is a new logistics connectivity initiative linking India, the United Arab Emirates, Saudi Arabia, Israel, and Europe — essentially a plan to bypass existing unstable logistics chokepoints. While no implementation framework or dedicated organization has been established yet, the European Union and India agreed on specific measures to realize IMEC in a joint statement last year.
Research Fellow Gil analyzed, "While the IMEC plan has been criticized for limitations in the energy sector and geopolitical risks along the route itself, there is also potential for IMEC's economic value to increase further if India rises as a manufacturing production base replacing China and if power supply for Middle East data centers and digital cable connections are completed."
Gil further emphasized, "If the IMEC plan, a multi-country coalition-type supply chain initiative, is successfully pursued, South Korea can use it as an opportunity to secure overseas demand for legacy industries during the industrial transition period over the next 10 to 15 years. The government must closely monitor trends in global new logistics route reorganization, including IMEC."
He continued, "It is necessary to pursue the expansion of bilateral investment agreements with Middle Eastern countries and negotiations for access to infrastructure procurement markets, review a mid-to-long-term roadmap for diversifying energy import sources, and systematically implement policies supporting the overseas expansion of legacy industries during the industrial transition period."