The first US-Iran ceasefire negotiations, which drew significant attention as the highest-level talks between the two countries in 47 years, have collapsed. Vice President JD Vance, who led the US delegation in negotiations in mediator country Pakistan, boarded his plane back to the United States on the 12th, stating, "We did not reach an agreement with Iran and are returning to the US without a deal." However, he left room for resumed talks, adding, "We presented our best and final offer, and we will see whether Iran accepts it going forward." The US demanded Iran's prohibition of nuclear weapons possession and immediate opening of the Strait of Hormuz, while Iran insisted on uranium enrichment rights and control over the Hormuz waterway, making it difficult to find common ground.
Even if negotiations resume, it remains uncertain whether an agreement can be reached within the "two-week ceasefire" deadline. In the worst-case scenario, if the Iran conflict becomes prolonged or escalates, the waterway connecting the Persian Gulf could be blocked for an extended period. We must also consider a situation where the US reaches only a vague, principled agreement with Iran on free passage through the Strait of Hormuz. In that case, the guarantee of free passage could be pushed onto countries like Korea that heavily use the strait, leaving them to fend for themselves.
Regardless of the outcome, the government must assume that uncertainty in energy and critical industrial raw material supply chains will become entrenched and devote all efforts to minimizing the shockwaves. First, dependence on Middle Eastern crude oil, helium (a semiconductor processing material), and urea (a fertilizer ingredient) must be drastically reduced, and procurement sources must be diversified to other regions. To diversify crude oil import sources, Korean refineries, which are optimized for Middle Eastern crude, need to reconfigure their facilities. Active fiscal, tax, and financial support is required to ensure that the resulting cost burden on companies does not lead to reduced investment and production.
Energy transition policies to reduce oil consumption and measures to domestically produce key imported raw materials must also be pursued simultaneously. It is particularly important to continuously expand investment in nuclear power generation, which is a stable and affordable baseload power source, and to keep increasing the adoption of electric vehicles. It is also worth considering government subsidies to industry for the price differential or support for developing innovative production technologies for materials like agricultural urea, which have relied on imports due to lack of domestic price competitiveness. Korea has the experience of developing domestic mass production technology for "agricultural ammonia catalysts," which were previously entirely imported, two years ago. The search for logistics networks to replace the Strait of Hormuz must also be accelerated. Since this cannot be pursued by the private sector alone, it can only be realized through the mobilization of full national capabilities.
