A panoramic view of the Strait of Hormuz. Situated between Iran and Oman and spanning approximately 34 km in width, this waterway is a critical energy corridor through which roughly 20% of the world's crude oil supply passes.
A de facto blockade has persisted following the US-Israel airstrikes on Iran on February 28, 2026. [Photo = Korea Business Review DB]
On April 7, marking the 38th day since the commencement of US-Israel military operations against Iran, diplomatic tensions surrounding the blockade of the Strait of Hormuz have reached their highest level.
President Trump has set a deadline stating that if Iran does not fully open the strait by 8 PM Eastern Time that day, he will strike power plants and bridges within Iran. Iran has maintained its position that it will not accept this deadline.
At the same time, diplomatic channels are active as Pakistan has presented a mediation proposal between the two sides. Trump evaluated Iran's proposal as "an important step forward, but not enough." With military warnings and diplomatic contacts coexisting simultaneously, the direction following the deadline remains unconfirmed.
The economic shock of this crisis is spreading beyond the energy market into supply chains, financial markets, and food security, once again laying bare the depth of South Korea's structural vulnerabilities.
1. Current Negotiation Stage: What is Being Discussed
Pakistan has delivered a 'two-step peace plan' to both sides, consisting of an immediate ceasefire and the reopening of the Strait of Hormuz as Phase 1, followed by reaching a comprehensive agreement within 15 to 20 days as Phase 2. This proposal is tentatively referred to as the 'Islamabad Accord' and is reportedly understood to include Iran's abandonment of its pursuit of nuclear weapons, the lifting of sanctions, and the return of frozen assets as final agreement contents.
Iranian Foreign Ministry spokesperson Esmaeil Baghaei publicly stated that the 15-point peace plan presented by the US is unacceptable. Iran maintains its position that it rejects a temporary ceasefire and that negotiations are only possible in a manner that guarantees a permanent end to the war.
Iran has delivered a 10-point official demand letter to the US side via Pakistan, including ending the war, guaranteeing safe navigation through the Strait of Hormuz, and lifting sanctions, according to Iranian state media IRNA. Trump evaluated this, stating it was "an important step forward, but not enough."
An Egyptian diplomatic source told NPR that a high-ranking Iranian official stated Iran is open to a 45-day ceasefire guaranteeing a permanent end to the war, but will not agree to reopening the strait based solely on a temporary ceasefire. The Iranian side also expressed its stance of rejecting deadline-style negotiations itself.
At this point, two major gaps are identified between the positions of the US and Iran. First, Iran is demanding a permanent end to the war and compensation for damages as preconditions, while the US is demanding the reopening of the strait first. Second, Iran maintains the principle that it will not accept externally imposed deadlines as a premise for negotiation.
2. Energy Market: Fluctuations Amid Uncertainty
As of April 6, WTI closed at $112.41 per barrel and Brent crude at $109.77. Compared to the start of the war on February 28, Brent crude has risen by approximately 50%.
Hiroki Shimazu, Senior Strategist at MCP Asset Management, assessed that the current situation is "closer to a prolonged deadlock rather than a decisive resolution," viewing partial easing through "quietly scaling down the tempo of strikes" via Oman's mediation as a more realistic scenario than a comprehensive agreement. He added, "The market has entered an event-driven phase where headline risk dominates intraday movements, and positioning must presuppose binary outcomes."
Marco Papic, Chief Geopolitical Strategist at BCA Research, estimated that global crude oil supply disruptions caused by the current war amount to roughly 4.5 million to 5 million barrels per day, equivalent to about 5% of global supply. He warned that this figure could double by mid-April, pointing to the exhaustion timing of currently operating strategic petroleum reserves and sanction relief measures as core variables.
The direction of oil prices is difficult to explain through a single variable. A high-volatility phase continues where prices move by more than $6 up and down at a single word from Trump, and expectations of diplomatic progress and concerns over military escalation are being reflected in prices simultaneously.
3. Diplomatic Landscape: Fragmentation of Participating Countries and Positions
High-ranking Iranian official Ali Akbar Velayati warned that Iran views the Bab el-Mandeb Strait, a major maritime route in the Red Sea, on equal footing with Hormuz. The Islamic Revolutionary Guard Corps (IRGC) Navy Command stated, "The Strait of Hormuz will never return to its previous state regarding the US and Israel."
The United Arab Emirates (UAE) officially expressed its support for US operations to control the Strait of Hormuz on April 5. Meanwhile, Qatar and Oman are known to prioritize diplomatic solutions over military methods, revealing differing stances within the Gulf Cooperation Council (GCC).
International Committee of the Red Cross (ICRC) President Mirjana Spoljaric issued a statement urging phased de-escalation, stating that "deliberate threats to civilian infrastructure must not become the new norm in wartime."
Signals warning of the potential spread of the conflict have also been observed. The IRGC claimed that the US amphibious assault ship LHA7 was attacked and moved south of the Indian Ocean. The US side has not officially confirmed this claim.
4. Implications for South Korean Companies
South Korea has sourced approximately 70% of its crude oil imports through the Strait of Hormuz, and currently 26 South Korean-flagged vessels are stranded in the Persian Gulf. The KOSPI recorded its largest single-session drop in its 43-year history, and the South Korean won fell to a 17-year low. The OECD downgraded South Korea's growth forecast by 0.4 percentage points, the largest cut among major economies, and raised its inflation forecast to 2.7%.
The shock to the petrochemical sector has already extended to the real economy. Due to disruptions in naphtha and propylene supply, LG Chem declared force majeure on core plasticizer exports. The South Korean government designated naphtha as an economic security item and enacted a 5-month export restriction measure.
Vulnerabilities have also been exposed in the semiconductor supply chain. South Korea has sourced 64.7% of its helium imports—essential for semiconductor manufacturing processes—from Qatar, and this supply is facing disruptions following the attack on Iran's Ras Laffan industrial complex.
President Lee Jae-myung presided over an emergency economic inspection meeting, and the government announced response measures including naphtha export controls, a ban on hoarding urea, expanding gasoline fuel tax cuts (7% to 15%), expanding diesel fuel tax cuts (10% to 25%), and including marine diesel in price caps. Deputy Prime Minister Hong Kyung-joon defined the current situation as an "economic wartime situation" and stated that a 3-stage contingency response system by scenario would be activated.
Diplomatic positioning is also a variable facing South Korea. CSIS analyzed that South Korea is likely to respond by monitoring the Trump administration's reactions while referencing Japan's moves in negotiations for transit permits with Iran. It pointed out that if Trump leaves the issue of strait passage up to individual countries, diplomatic space may open up, but conversely, if the US interprets this negatively, the possibility of additional tariff pressure cannot be ruled out.
A more fundamental challenge revealed by this crisis is the vulnerability of its energy dependence structure.
The Carnegie Endowment for International Peace evaluated that the Iran conflict did not create South Korea's energy vulnerability anew, but rather exposed how dangerous the fossil fuel import dependency structure accumulated over decades had become. Aside from short-term responses, diversifying energy procurement sources and expanding domestic energy sources are resurfacing as mid-term tasks for South Korea's industrial policy.
KBR Insight
April 7 could be a short-term turning point for this crisis. However, it is difficult to definitively predict the direction at this point.
Trump has a precedent of setting similar deadlines in the past and then extending them, and Iran maintains the principle of not accepting any form of deadline.
There are three verifiable checkpoints.
First, whether actual military action takes place after Trump's deadline and its scope.
Second, whether Pakistan's mediation proposal can converge into a framework acceptable to both sides.
Third, the trend of oil prices after mid-April, when the effects of IEA strategic petroleum reserve releases and temporary sanction relief measures are exhausted.
The current configuration, where negotiations and military warnings proceed simultaneously, is in a state that could converge in either direction within a short period. What is clear is that even if the strait is reopened, it will be difficult for the structure where geopolitical risk premiums are reflected in the energy market to be resolved in a short time.