On the tech-heavy Kosdaq, which also saw a 14% decline, a circuit breaker was triggered. Concerns over energy security overshadowed investor confidence about AI demand for semiconductors, causing shares of Samsung Electronics to drop 11.7% and those of semiconductor supplier SK Hynix to drop 9.6%.
Earlier this year, South Korea’s stock market was among the best in the world, but it is now especially vulnerable to the disruption in maritime trade caused by the Iran crisis. South Korea imports almost all of its crude oil and other resources from the Middle East.
A significant flashpoint has been identified as the Strait of Hormuz. Approximately 75% of the oil flows via the chokepoint, with about 20 million barrels passing through it daily, primarily to energy-hungry economies in Asia, such as South Korea, Japan, China, and India, according to the US Energy Information Administration. Although gains slowed after President Trump promised steps to protect shipping, oil prices still rose.
International Brent crude is currently trading at above $84, the highest price since 2024, while US benchmark crude is currently trading at $77 per barrel. Since the week began, both contracts have increased by about 15%, and the markets are still very erratic. President Trump said he gave the US Development Finance Corporation instructions to provide political risk insurance and assurances for marine trade in a White House tweet on X.
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