{"content_id":"6gornixudc","slug":"us-iran-conflict-risk-and-global-economic-scenarios","locale":"en","schema_type":"Report","category":"report","category_name":"Report","title":"Risk of U.S.-Iran Conflict and the Global Economy: Worst-Case Scenarios and Transmission Channels","summary":"The conflict between the United States and Iran is a complex crisis involving not only the nuclear issue but also sanctions relief, ballistic missiles, regional armed groups, and Israel's security. The worst economic shock would occur not from limited hostilities alone, but when prolonged shipping disruptions in the Strait of Hormuz and rising oil prices spread through inflation, interest rates, and trade.","sponsorship_disclosure":null,"author":{"name":"Injoys Editorial Team","url":"https://injoys.com/ko/about"},"key_points":["The main obstacles to U.S.-Iran negotiations are nuclear verification, the sequencing of sanctions relief, ballistic missiles, regional armed groups, and accumulated mistrust.","There is less room for compromise on ballistic missiles than on the nuclear issue because Iran's deterrence strategy directly conflicts with Israel's security concerns.","The most important risk transmission channel for the global economy is shipping disruption in the Strait of Hormuz driving up crude oil and LNG prices alongside marine insurance premiums.","A prolonged low-intensity conflict could weaken business investment and employment and entrench uncertainty over inflation even without escalating into a full-scale war.","A complete closure of the strait and a regional war constitute the worst-case scenario, but the likelihood of occurrence and the scale of economic damage must be assessed separately."],"content_markdown":"The confrontation between the United States and Iran is difficult to explain through a single war or one round of negotiations. This is because not only nuclear activities and economic sanctions but also ballistic missiles, Israeli security, regional armed groups, and maritime shipping routes are interconnected. Therefore, when analyzing the risk of conflict, confirmed facts, political claims, and possible scenarios must be kept separate.\n\nThis article does not adopt as confirmed fact the premise that the United States and Iran are engaged in a full-scale war at a particular point in time or that the United States has bombed Iran for at least 40 days. Because whether hostilities are occurring and their scope may change over time, the latest announcements from the U.S. government, the Iranian government, the International Atomic Energy Agency (IAEA), the United Nations, and major news agencies should be checked together.\n\n## Why Does the U.S.–Iran Conflict Keep Recurring?\n\nThere are broadly five central issues in U.S.–Iran relations.\n\n1. **Nuclear activities and verification**: The dispute concerns uranium enrichment levels, stockpiles, access to facilities, and the scope of IAEA verification.\n2. **Economic sanctions and the sequence of relief**: Iran demands meaningful sanctions relief, while the United States may take the position that verifiable measures must be implemented first.\n3. **Ballistic missiles**: Iran sees missiles as a core capability for deterring external attacks, while the United States and Israel regard them as a direct security threat.\n4. **Regional armed groups**: Iran’s relationships with pro-Iranian forces operating in Lebanon, Syria, Iraq, Yemen, and elsewhere broaden the scope of potential conflict.\n5. **Mutual distrust**: The experience of the Joint Comprehensive Plan of Action (JCPOA), concluded in 2015, and the U.S. withdrawal in 2018 has intensified doubts over whether a new agreement would survive a change of government.\n\nThe JCPOA was an agreement focused on limiting and verifying Iran’s nuclear program. It was not an agreement to comprehensively dismantle its ballistic missile capabilities. United Nations Security Council Resolution 2231 also addressed implementation of the nuclear agreement and missile-related issues, but it should not be interpreted as an agreement requiring the uniform elimination of all missiles.\n\n## Why Ballistic Missiles Are the Most Difficult Negotiating Issue\n\nIran does not possess an air force or overseas military bases comparable to those of the United States. Amid this asymmetry, Iran views missiles and drones as tools that can deter Israel, U.S. military bases, or regional rivals. This is why the Iranian leadership is likely to perceive missile restrictions not as simple disarmament but as an issue of regime survival.\n\nFrom the perspective of Israel and the United States, however, missiles equipped with conventional warheads can attack cities, bases, ports, and energy facilities regardless of whether they can carry nuclear warheads. This may prompt the counterargument that an agreement limiting only nuclear activities while leaving delivery systems and regional strike capabilities intact is insufficient.\n\nFor this reason, the following interim agreements may also be considered, but each presents verification challenges.\n\n- Limits on missile ranges or the number of tests\n- A ban on transfers of certain types of launch vehicles and related technologies\n- Restrictions on supplying missiles and drones to regional armed groups\n- A phased exchange of nuclear facility verification and sanctions relief\n- Establishment of a separate communication channel for maritime safety and the prevention of accidental clashes\n\nNuclear material can be verified to some extent through facilities and measuring equipment, but mobile launchers and transfers of components and technology are more difficult to track. Therefore, comprehensive negotiations seeking to resolve the missile issue all at once may be politically attractive but could have a lower chance of producing an actual agreement.\n\n## How U.S. Domestic Politics Affects Policy\n\nExplaining U.S. policy toward Iran solely as a confrontation between pro-Israel hardliners and pro-capitalist moderates is an excessive simplification. Actual decisions involve the president and the National Security Council, the Department of Defense, the Department of State, the Department of the Treasury, intelligence agencies, Congress, allies, and domestic public opinion in different ways.\n\n| Policy objective | Factors encouraging a hard-line response | Factors restraining escalation |\n|---|---|---|\n| Limiting Iran’s nuclear capabilities | Concerns over verification gaps and highly enriched uranium | Difficulty of completely eliminating nuclear knowledge and facilities through attacks |\n| Protecting Israel and U.S. forces | Missile and drone attacks and proxy-force activities | Risk of U.S. casualties and a cycle of retaliation |\n| Stabilizing the U.S. economy | Need to protect maritime routes | Higher oil and gasoline prices and fiscal burdens |\n| Securing political credibility | Avoiding criticism that deterrence has failed | Backlash against a prolonged war and unclear war aims |\n\nHigher oil prices can influence U.S. voters and policy decisions, but they do not automatically lead to a particular election result or presidential impeachment. Elections are affected by multiple variables, including employment, real income, and candidate competitiveness, while impeachment requires a separate constitutional and political process.\n\n## Why Iran Endures Despite Pressure\n\nIt is insufficient to explain Iran’s ability to endure solely through repression by an authoritarian regime. The characteristics of its political system may enable it to control economic suffering politically, but prolonged sanctions and war genuinely weaken state finances, industrial production, the currency’s value, and the regime’s legitimacy.\n\nIran’s strategic calculations may include the following elements.\n\n- Asymmetric deterrence using missiles and drones\n- Dispersed influence through friendly regional forces\n- Expectations that opposing countries will face the burdens of escalation and war fatigue\n- Securing foreign currency through crude oil exports and sanctions-evasion networks\n- Distrust that an agreement could once again be abandoned after a change of government in the United States\n\nHowever, without internal leadership documents or reliable evidence, it is difficult to conclude that Iran deliberately chose the current conflict as an opportunity more favorable than a future full-scale war. This is a possible strategic interpretation, not a confirmed fact.\n\n## Why the Strait of Hormuz Is a Key Variable for the Global Economy\n\nThe Strait of Hormuz is a narrow maritime passage connecting the Persian Gulf and the Gulf of Oman. A substantial share of the crude oil or LNG from Saudi Arabia, Iraq, Kuwait, the United Arab Emirates, Qatar, and Iran passes through this route.\n\nIn estimates compiled at different times, the U.S. Energy Information Administration (EIA) has assessed the volume of oil passing through the Strait of Hormuz as equivalent to approximately one-fifth of global oil consumption. The figures vary depending on production levels and the period measured, but it is clear that the strait’s importance extends beyond the export problems of any single country.\n\nAn economic shock can occur even without a complete closure of the strait.\n\n1. As the risk of attack increases, war-risk insurance premiums for vessels rise.\n2. Shipping and energy companies suspend operations or impose security surcharges.\n3. A geopolitical risk premium is added to spot crude oil and LNG prices.\n4. Costs rise for the refining, petrochemical, aviation, and transportation industries.\n5. Consumer prices increase, reducing central banks’ room to lower interest rates.\n6. Energy-importing countries face pressure on their trade balances and currency values.\n\nSome oil-producing countries can bypass the strait through pipelines, but alternative transport capacity cannot replace all maritime volumes. Therefore, the magnitude of the shock depends less on whether the strait is formally closed than on the scale and duration of transportation disruptions, inventories, spare production capacity among oil-producing countries, and releases from national strategic reserves.\n\n## Four Conflict Scenarios\n\nPresenting the worst-case scenario as the baseline outlook can exaggerate the risks. Analyses should distinguish between the likelihood of occurrence and the scale of damage.\n\n| Scenario | Key characteristics | Impact on energy markets | Impact on the global economy |\n|---|---|---|---|\n| Limited conflict and managed deterrence | Private mediation after one-off attacks | Temporary risk premium | Possible stabilization after a limited rise in prices |\n| Prolonged low-intensity conflict | Repeated drone attacks, threats to vessels, and proxy-force clashes | Structural increase in insurance premiums and freight rates | Delayed investment and higher manufacturing costs |\n| Sustained shipping disruptions in Hormuz | Seizures, concerns over mines, and attacks on ports and tankers | Sharp increase in crude oil and LNG supply uncertainty | Renewed acceleration of inflation and slower growth |\n| Broad regional war | Expansion of direct hostilities among the United States, Iran, Israel, and regional forces | Simultaneous shocks to production facilities and transportation networks | Stagflation, financial market instability, and reduced trade |\n\n### Scenario 1: De-escalation After a Limited Conflict\n\nIn this case, both sides demonstrate their military resolve without directly threatening the other side’s regime or critical infrastructure. A private agreement could be reached through mediation by Oman, Qatar, or a European country. Oil prices may surge and then surrender part of those gains once it is confirmed that no supply disruption has occurred.\n\n### Scenario 2: Chronic Low-Intensity Conflict in the Middle East\n\nThis is a situation in which attacks on vessels, drone and missile launches, and retaliation recur without either a formal end to hostilities or a full-scale war. In this case, the greatest harm is the normalization of uncertainty. Companies incorporate higher transportation and insurance costs into their cost structures, while investors demand a higher risk premium for business in the Middle East.\n\nCaution is required when comparing this with the Russia–Ukraine war. A war centered on interstate ground combat, territorial occupation, and front lines has a different military and economic structure from a conflict centered on maritime routes, proxy forces, and limited strikes.\n\n### Scenario 3: Sustained Shipping Disruptions in the Strait of Hormuz\n\nThis scenario has the greatest potential to deliver a direct shock to the global economy. Even without a complete closure, actual transportation capacity would decline if major shipping companies suspended operations and insurance became difficult to obtain. Prices could rise not only for crude oil but also for LNG and petroleum products.\n\n### Scenario 4: Broad Regional War\n\nIf attacks by U.S. forces or Israel on critical facilities, large-scale casualties, and sustained attacks on Iranian territory occur together, the scope of retaliation could expand. In this case, production facilities and ports in the Gulf region, U.S. military bases, and Israeli cities would be exposed to danger simultaneously. This is a worst-case scenario with extremely severe damage, but whether there is sufficient basis to conclude that it is the most likely outcome must be assessed separately.\n\n## Channels Through Which the Effects Spread to the Global Economy\n\nAn energy shock is transmitted to the real economy in the following sequence.\n\n| Channel | Initial shock | Subsequent effects |\n|---|---|---|\n| Crude oil | Higher international oil prices and refining margins | Higher gasoline, diesel, and jet fuel prices |\n| Natural gas | LNG shipping uncertainty and higher spot prices | Increased costs for electricity, municipal gas, and industrial fuel |\n| Shipping | Higher insurance premiums, freight rates, and security costs | Higher import prices and delivery delays |\n| Prices | Pass-through of energy and transportation costs | Delayed interest-rate cuts and lower real income |\n| Financial markets | Greater preference for safe-haven assets and increased volatility | Possible stock market corrections and weaker emerging-market currencies |\n| Business activity | Uncertainty over costs and the demand outlook | Investment, hiring, and inventory expansion put on hold |\n\nThe severity of the shock differs by country. Net importers of oil and gas, countries with energy-intensive manufacturing sectors, and countries with weakening currencies are relatively vulnerable. Conversely, energy exporters may benefit from higher prices, but they do not necessarily gain if attacks on facilities and logistics disruptions occur.\n\n## Potential Effects on the South Korean Economy and Cost of Living\n\nSouth Korea is highly dependent on overseas supplies of crude oil and natural gas, and energy from the Middle East accounts for an important share. Disruptions in the Strait of Hormuz could affect not only prices at domestic gas stations but also electricity and gas costs, airfares, chemical products, plastics, and transportation costs for agricultural and fishery products.\n\nHowever, increases in international oil prices are not immediately reflected in domestic prices to the same extent. Exchange rates, refiners’ inventories and procurement contracts, taxes, fuel tax adjustments, and lags in price pass-through all play a role. Therefore, a specific conflict-related news report alone should not be used to conclude what the domestic inflation rate will be.\n\n## Key Indicators for Assessing a Deteriorating Situation\n\nRather than focusing on sensational breaking news, it is more useful to determine whether multiple indicators are simultaneously moving in the same direction.\n\n- Actual vessel traffic through the Strait of Hormuz and increases in diversions and anchoring\n- War-risk insurance premiums and maritime freight rates for oil tankers and LNG carriers\n- Spot premiums for Brent crude, Dubai crude, and Middle Eastern crude oil\n- Announcements of production facility and port shutdowns by major oil-producing countries\n- Changes in deployments of troops, air-defense systems, and aircraft carriers by the United States and regional countries\n- Embassy evacuations, elevated travel advisories, and cancellations of civilian flights\n- IAEA inspection access and reports concerning Iranian nuclear material\n- Strategic petroleum reserve releases and coordinated responses by International Energy Agency member countries\n- Attacks by Iran-linked armed groups and the scope of U.S. and Israeli retaliation\n\nAn attack on a single tanker or a one-day surge in oil prices is a serious event, but it does not immediately mean a full-scale war or a global economic crisis. What matters more is how long physical supply reductions and transportation disruptions persist.\n\n## Conclusion\n\nIt is difficult to say that the solution to the U.S.–Iran conflict lies solely in Washington or solely in Tehran. U.S. domestic politics, Israel’s security judgments, Iran’s logic of regime survival, independent actions by regional armed groups, and mediation by Gulf states all help determine the outcome.\n\nThe situation the global economy must guard against most is not a one-off missile strike itself but a prolonged disruption of shipping through the Strait of Hormuz. This could trigger a chain reaction in oil and LNG prices, maritime insurance premiums, exchange rates, consumer prices, and interest rates. However, the worst-case outcome should not be treated as a firm prediction; risks should instead be updated based on the triggers and real-time indicators for each scenario.","content_html":"\u003cp\u003eThe confrontation between the United States and Iran is difficult to explain through a single war or one round of negotiations. This is because not only nuclear activities and economic sanctions but also ballistic missiles, Israeli security, regional armed groups, and maritime shipping routes are interconnected. Therefore, when analyzing the risk of conflict, confirmed facts, political claims, and possible scenarios must be kept separate.\u003c/p\u003e\n\u003cp\u003eThis article does not adopt as confirmed fact the premise that the United States and Iran are engaged in a full-scale war at a particular point in time or that the United States has bombed Iran for at least 40 days. Because whether hostilities are occurring and their scope may change over time, the latest announcements from the U.S. government, the Iranian government, the International Atomic Energy Agency (IAEA), the United Nations, and major news agencies should be checked together.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#why-does-the-usiran-conflict-keep-recurring\" class=\"anchor\" id=\"why-does-the-usiran-conflict-keep-recurring\"\u003e\u003c/a\u003eWhy Does the U.S.–Iran Conflict Keep Recurring?\u003c/h2\u003e\n\u003cp\u003eThere are broadly five central issues in U.S.–Iran relations.\u003c/p\u003e\n\u003col\u003e\n\u003cli\u003e\n\u003cstrong\u003eNuclear activities and verification\u003c/strong\u003e: The dispute concerns uranium enrichment levels, stockpiles, access to facilities, and the scope of IAEA verification.\u003c/li\u003e\n\u003cli\u003e\n\u003cstrong\u003eEconomic sanctions and the sequence of relief\u003c/strong\u003e: Iran demands meaningful sanctions relief, while the United States may take the position that verifiable measures must be implemented first.\u003c/li\u003e\n\u003cli\u003e\n\u003cstrong\u003eBallistic missiles\u003c/strong\u003e: Iran sees missiles as a core capability for deterring external attacks, while the United States and Israel regard them as a direct security threat.\u003c/li\u003e\n\u003cli\u003e\n\u003cstrong\u003eRegional armed groups\u003c/strong\u003e: Iran’s relationships with pro-Iranian forces operating in Lebanon, Syria, Iraq, Yemen, and elsewhere broaden the scope of potential conflict.\u003c/li\u003e\n\u003cli\u003e\n\u003cstrong\u003eMutual distrust\u003c/strong\u003e: The experience of the Joint Comprehensive Plan of Action (JCPOA), concluded in 2015, and the U.S. withdrawal in 2018 has intensified doubts over whether a new agreement would survive a change of government.\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eThe JCPOA was an agreement focused on limiting and verifying Iran’s nuclear program. It was not an agreement to comprehensively dismantle its ballistic missile capabilities. United Nations Security Council Resolution 2231 also addressed implementation of the nuclear agreement and missile-related issues, but it should not be interpreted as an agreement requiring the uniform elimination of all missiles.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#why-ballistic-missiles-are-the-most-difficult-negotiating-issue\" class=\"anchor\" id=\"why-ballistic-missiles-are-the-most-difficult-negotiating-issue\"\u003e\u003c/a\u003eWhy Ballistic Missiles Are the Most Difficult Negotiating Issue\u003c/h2\u003e\n\u003cp\u003eIran does not possess an air force or overseas military bases comparable to those of the United States. Amid this asymmetry, Iran views missiles and drones as tools that can deter Israel, U.S. military bases, or regional rivals. This is why the Iranian leadership is likely to perceive missile restrictions not as simple disarmament but as an issue of regime survival.\u003c/p\u003e\n\u003cp\u003eFrom the perspective of Israel and the United States, however, missiles equipped with conventional warheads can attack cities, bases, ports, and energy facilities regardless of whether they can carry nuclear warheads. This may prompt the counterargument that an agreement limiting only nuclear activities while leaving delivery systems and regional strike capabilities intact is insufficient.\u003c/p\u003e\n\u003cp\u003eFor this reason, the following interim agreements may also be considered, but each presents verification challenges.\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eLimits on missile ranges or the number of tests\u003c/li\u003e\n\u003cli\u003eA ban on transfers of certain types of launch vehicles and related technologies\u003c/li\u003e\n\u003cli\u003eRestrictions on supplying missiles and drones to regional armed groups\u003c/li\u003e\n\u003cli\u003eA phased exchange of nuclear facility verification and sanctions relief\u003c/li\u003e\n\u003cli\u003eEstablishment of a separate communication channel for maritime safety and the prevention of accidental clashes\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eNuclear material can be verified to some extent through facilities and measuring equipment, but mobile launchers and transfers of components and technology are more difficult to track. Therefore, comprehensive negotiations seeking to resolve the missile issue all at once may be politically attractive but could have a lower chance of producing an actual agreement.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#how-us-domestic-politics-affects-policy\" class=\"anchor\" id=\"how-us-domestic-politics-affects-policy\"\u003e\u003c/a\u003eHow U.S. Domestic Politics Affects Policy\u003c/h2\u003e\n\u003cp\u003eExplaining U.S. policy toward Iran solely as a confrontation between pro-Israel hardliners and pro-capitalist moderates is an excessive simplification. Actual decisions involve the president and the National Security Council, the Department of Defense, the Department of State, the Department of the Treasury, intelligence agencies, Congress, allies, and domestic public opinion in different ways.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003ePolicy objective\u003c/th\u003e\n\u003cth\u003eFactors encouraging a hard-line response\u003c/th\u003e\n\u003cth\u003eFactors restraining escalation\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Policy objective\"\u003eLimiting Iran’s nuclear capabilities\u003c/td\u003e\n\u003ctd data-label=\"Factors encouraging a hard-line response\"\u003eConcerns over verification gaps and highly enriched uranium\u003c/td\u003e\n\u003ctd data-label=\"Factors restraining escalation\"\u003eDifficulty of completely eliminating nuclear knowledge and facilities through attacks\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Policy objective\"\u003eProtecting Israel and U.S. forces\u003c/td\u003e\n\u003ctd data-label=\"Factors encouraging a hard-line response\"\u003eMissile and drone attacks and proxy-force activities\u003c/td\u003e\n\u003ctd data-label=\"Factors restraining escalation\"\u003eRisk of U.S. casualties and a cycle of retaliation\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Policy objective\"\u003eStabilizing the U.S. economy\u003c/td\u003e\n\u003ctd data-label=\"Factors encouraging a hard-line response\"\u003eNeed to protect maritime routes\u003c/td\u003e\n\u003ctd data-label=\"Factors restraining escalation\"\u003eHigher oil and gasoline prices and fiscal burdens\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Policy objective\"\u003eSecuring political credibility\u003c/td\u003e\n\u003ctd data-label=\"Factors encouraging a hard-line response\"\u003eAvoiding criticism that deterrence has failed\u003c/td\u003e\n\u003ctd data-label=\"Factors restraining escalation\"\u003eBacklash against a prolonged war and unclear war aims\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eHigher oil prices can influence U.S. voters and policy decisions, but they do not automatically lead to a particular election result or presidential impeachment. Elections are affected by multiple variables, including employment, real income, and candidate competitiveness, while impeachment requires a separate constitutional and political process.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#why-iran-endures-despite-pressure\" class=\"anchor\" id=\"why-iran-endures-despite-pressure\"\u003e\u003c/a\u003eWhy Iran Endures Despite Pressure\u003c/h2\u003e\n\u003cp\u003eIt is insufficient to explain Iran’s ability to endure solely through repression by an authoritarian regime. The characteristics of its political system may enable it to control economic suffering politically, but prolonged sanctions and war genuinely weaken state finances, industrial production, the currency’s value, and the regime’s legitimacy.\u003c/p\u003e\n\u003cp\u003eIran’s strategic calculations may include the following elements.\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eAsymmetric deterrence using missiles and drones\u003c/li\u003e\n\u003cli\u003eDispersed influence through friendly regional forces\u003c/li\u003e\n\u003cli\u003eExpectations that opposing countries will face the burdens of escalation and war fatigue\u003c/li\u003e\n\u003cli\u003eSecuring foreign currency through crude oil exports and sanctions-evasion networks\u003c/li\u003e\n\u003cli\u003eDistrust that an agreement could once again be abandoned after a change of government in the United States\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eHowever, without internal leadership documents or reliable evidence, it is difficult to conclude that Iran deliberately chose the current conflict as an opportunity more favorable than a future full-scale war. This is a possible strategic interpretation, not a confirmed fact.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#why-the-strait-of-hormuz-is-a-key-variable-for-the-global-economy\" class=\"anchor\" id=\"why-the-strait-of-hormuz-is-a-key-variable-for-the-global-economy\"\u003e\u003c/a\u003eWhy the Strait of Hormuz Is a Key Variable for the Global Economy\u003c/h2\u003e\n\u003cp\u003eThe Strait of Hormuz is a narrow maritime passage connecting the Persian Gulf and the Gulf of Oman. A substantial share of the crude oil or LNG from Saudi Arabia, Iraq, Kuwait, the United Arab Emirates, Qatar, and Iran passes through this route.\u003c/p\u003e\n\u003cp\u003eIn estimates compiled at different times, the U.S. Energy Information Administration (EIA) has assessed the volume of oil passing through the Strait of Hormuz as equivalent to approximately one-fifth of global oil consumption. The figures vary depending on production levels and the period measured, but it is clear that the strait’s importance extends beyond the export problems of any single country.\u003c/p\u003e\n\u003cp\u003eAn economic shock can occur even without a complete closure of the strait.\u003c/p\u003e\n\u003col\u003e\n\u003cli\u003eAs the risk of attack increases, war-risk insurance premiums for vessels rise.\u003c/li\u003e\n\u003cli\u003eShipping and energy companies suspend operations or impose security surcharges.\u003c/li\u003e\n\u003cli\u003eA geopolitical risk premium is added to spot crude oil and LNG prices.\u003c/li\u003e\n\u003cli\u003eCosts rise for the refining, petrochemical, aviation, and transportation industries.\u003c/li\u003e\n\u003cli\u003eConsumer prices increase, reducing central banks’ room to lower interest rates.\u003c/li\u003e\n\u003cli\u003eEnergy-importing countries face pressure on their trade balances and currency values.\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eSome oil-producing countries can bypass the strait through pipelines, but alternative transport capacity cannot replace all maritime volumes. Therefore, the magnitude of the shock depends less on whether the strait is formally closed than on the scale and duration of transportation disruptions, inventories, spare production capacity among oil-producing countries, and releases from national strategic reserves.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#four-conflict-scenarios\" class=\"anchor\" id=\"four-conflict-scenarios\"\u003e\u003c/a\u003eFour Conflict Scenarios\u003c/h2\u003e\n\u003cp\u003ePresenting the worst-case scenario as the baseline outlook can exaggerate the risks. Analyses should distinguish between the likelihood of occurrence and the scale of damage.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eScenario\u003c/th\u003e\n\u003cth\u003eKey characteristics\u003c/th\u003e\n\u003cth\u003eImpact on energy markets\u003c/th\u003e\n\u003cth\u003eImpact on the global economy\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Scenario\"\u003eLimited conflict and managed deterrence\u003c/td\u003e\n\u003ctd data-label=\"Key characteristics\"\u003ePrivate mediation after one-off attacks\u003c/td\u003e\n\u003ctd data-label=\"Impact on energy markets\"\u003eTemporary risk premium\u003c/td\u003e\n\u003ctd data-label=\"Impact on the global economy\"\u003ePossible stabilization after a limited rise in prices\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Scenario\"\u003eProlonged low-intensity conflict\u003c/td\u003e\n\u003ctd data-label=\"Key characteristics\"\u003eRepeated drone attacks, threats to vessels, and proxy-force clashes\u003c/td\u003e\n\u003ctd data-label=\"Impact on energy markets\"\u003eStructural increase in insurance premiums and freight rates\u003c/td\u003e\n\u003ctd data-label=\"Impact on the global economy\"\u003eDelayed investment and higher manufacturing costs\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Scenario\"\u003eSustained shipping disruptions in Hormuz\u003c/td\u003e\n\u003ctd data-label=\"Key characteristics\"\u003eSeizures, concerns over mines, and attacks on ports and tankers\u003c/td\u003e\n\u003ctd data-label=\"Impact on energy markets\"\u003eSharp increase in crude oil and LNG supply uncertainty\u003c/td\u003e\n\u003ctd data-label=\"Impact on the global economy\"\u003eRenewed acceleration of inflation and slower growth\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Scenario\"\u003eBroad regional war\u003c/td\u003e\n\u003ctd data-label=\"Key characteristics\"\u003eExpansion of direct hostilities among the United States, Iran, Israel, and regional forces\u003c/td\u003e\n\u003ctd data-label=\"Impact on energy markets\"\u003eSimultaneous shocks to production facilities and transportation networks\u003c/td\u003e\n\u003ctd data-label=\"Impact on the global economy\"\u003eStagflation, financial market instability, and reduced trade\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003ch3\u003e\n\u003ca href=\"#scenario-1-de-escalation-after-a-limited-conflict\" class=\"anchor\" id=\"scenario-1-de-escalation-after-a-limited-conflict\"\u003e\u003c/a\u003eScenario 1: De-escalation After a Limited Conflict\u003c/h3\u003e\n\u003cp\u003eIn this case, both sides demonstrate their military resolve without directly threatening the other side’s regime or critical infrastructure. A private agreement could be reached through mediation by Oman, Qatar, or a European country. Oil prices may surge and then surrender part of those gains once it is confirmed that no supply disruption has occurred.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#scenario-2-chronic-low-intensity-conflict-in-the-middle-east\" class=\"anchor\" id=\"scenario-2-chronic-low-intensity-conflict-in-the-middle-east\"\u003e\u003c/a\u003eScenario 2: Chronic Low-Intensity Conflict in the Middle East\u003c/h3\u003e\n\u003cp\u003eThis is a situation in which attacks on vessels, drone and missile launches, and retaliation recur without either a formal end to hostilities or a full-scale war. In this case, the greatest harm is the normalization of uncertainty. Companies incorporate higher transportation and insurance costs into their cost structures, while investors demand a higher risk premium for business in the Middle East.\u003c/p\u003e\n\u003cp\u003eCaution is required when comparing this with the Russia–Ukraine war. A war centered on interstate ground combat, territorial occupation, and front lines has a different military and economic structure from a conflict centered on maritime routes, proxy forces, and limited strikes.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#scenario-3-sustained-shipping-disruptions-in-the-strait-of-hormuz\" class=\"anchor\" id=\"scenario-3-sustained-shipping-disruptions-in-the-strait-of-hormuz\"\u003e\u003c/a\u003eScenario 3: Sustained Shipping Disruptions in the Strait of Hormuz\u003c/h3\u003e\n\u003cp\u003eThis scenario has the greatest potential to deliver a direct shock to the global economy. Even without a complete closure, actual transportation capacity would decline if major shipping companies suspended operations and insurance became difficult to obtain. Prices could rise not only for crude oil but also for LNG and petroleum products.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#scenario-4-broad-regional-war\" class=\"anchor\" id=\"scenario-4-broad-regional-war\"\u003e\u003c/a\u003eScenario 4: Broad Regional War\u003c/h3\u003e\n\u003cp\u003eIf attacks by U.S. forces or Israel on critical facilities, large-scale casualties, and sustained attacks on Iranian territory occur together, the scope of retaliation could expand. In this case, production facilities and ports in the Gulf region, U.S. military bases, and Israeli cities would be exposed to danger simultaneously. This is a worst-case scenario with extremely severe damage, but whether there is sufficient basis to conclude that it is the most likely outcome must be assessed separately.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#channels-through-which-the-effects-spread-to-the-global-economy\" class=\"anchor\" id=\"channels-through-which-the-effects-spread-to-the-global-economy\"\u003e\u003c/a\u003eChannels Through Which the Effects Spread to the Global Economy\u003c/h2\u003e\n\u003cp\u003eAn energy shock is transmitted to the real economy in the following sequence.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eChannel\u003c/th\u003e\n\u003cth\u003eInitial shock\u003c/th\u003e\n\u003cth\u003eSubsequent effects\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Channel\"\u003eCrude oil\u003c/td\u003e\n\u003ctd data-label=\"Initial shock\"\u003eHigher international oil prices and refining margins\u003c/td\u003e\n\u003ctd data-label=\"Subsequent effects\"\u003eHigher gasoline, diesel, and jet fuel prices\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Channel\"\u003eNatural gas\u003c/td\u003e\n\u003ctd data-label=\"Initial shock\"\u003eLNG shipping uncertainty and higher spot prices\u003c/td\u003e\n\u003ctd data-label=\"Subsequent effects\"\u003eIncreased costs for electricity, municipal gas, and industrial fuel\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Channel\"\u003eShipping\u003c/td\u003e\n\u003ctd data-label=\"Initial shock\"\u003eHigher insurance premiums, freight rates, and security costs\u003c/td\u003e\n\u003ctd data-label=\"Subsequent effects\"\u003eHigher import prices and delivery delays\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Channel\"\u003ePrices\u003c/td\u003e\n\u003ctd data-label=\"Initial shock\"\u003ePass-through of energy and transportation costs\u003c/td\u003e\n\u003ctd data-label=\"Subsequent effects\"\u003eDelayed interest-rate cuts and lower real income\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Channel\"\u003eFinancial markets\u003c/td\u003e\n\u003ctd data-label=\"Initial shock\"\u003eGreater preference for safe-haven assets and increased volatility\u003c/td\u003e\n\u003ctd data-label=\"Subsequent effects\"\u003ePossible stock market corrections and weaker emerging-market currencies\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Channel\"\u003eBusiness activity\u003c/td\u003e\n\u003ctd data-label=\"Initial shock\"\u003eUncertainty over costs and the demand outlook\u003c/td\u003e\n\u003ctd data-label=\"Subsequent effects\"\u003eInvestment, hiring, and inventory expansion put on hold\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eThe severity of the shock differs by country. Net importers of oil and gas, countries with energy-intensive manufacturing sectors, and countries with weakening currencies are relatively vulnerable. Conversely, energy exporters may benefit from higher prices, but they do not necessarily gain if attacks on facilities and logistics disruptions occur.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#potential-effects-on-the-south-korean-economy-and-cost-of-living\" class=\"anchor\" id=\"potential-effects-on-the-south-korean-economy-and-cost-of-living\"\u003e\u003c/a\u003ePotential Effects on the South Korean Economy and Cost of Living\u003c/h2\u003e\n\u003cp\u003eSouth Korea is highly dependent on overseas supplies of crude oil and natural gas, and energy from the Middle East accounts for an important share. Disruptions in the Strait of Hormuz could affect not only prices at domestic gas stations but also electricity and gas costs, airfares, chemical products, plastics, and transportation costs for agricultural and fishery products.\u003c/p\u003e\n\u003cp\u003eHowever, increases in international oil prices are not immediately reflected in domestic prices to the same extent. Exchange rates, refiners’ inventories and procurement contracts, taxes, fuel tax adjustments, and lags in price pass-through all play a role. Therefore, a specific conflict-related news report alone should not be used to conclude what the domestic inflation rate will be.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#key-indicators-for-assessing-a-deteriorating-situation\" class=\"anchor\" id=\"key-indicators-for-assessing-a-deteriorating-situation\"\u003e\u003c/a\u003eKey Indicators for Assessing a Deteriorating Situation\u003c/h2\u003e\n\u003cp\u003eRather than focusing on sensational breaking news, it is more useful to determine whether multiple indicators are simultaneously moving in the same direction.\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eActual vessel traffic through the Strait of Hormuz and increases in diversions and anchoring\u003c/li\u003e\n\u003cli\u003eWar-risk insurance premiums and maritime freight rates for oil tankers and LNG carriers\u003c/li\u003e\n\u003cli\u003eSpot premiums for Brent crude, Dubai crude, and Middle Eastern crude oil\u003c/li\u003e\n\u003cli\u003eAnnouncements of production facility and port shutdowns by major oil-producing countries\u003c/li\u003e\n\u003cli\u003eChanges in deployments of troops, air-defense systems, and aircraft carriers by the United States and regional countries\u003c/li\u003e\n\u003cli\u003eEmbassy evacuations, elevated travel advisories, and cancellations of civilian flights\u003c/li\u003e\n\u003cli\u003eIAEA inspection access and reports concerning Iranian nuclear material\u003c/li\u003e\n\u003cli\u003eStrategic petroleum reserve releases and coordinated responses by International Energy Agency member countries\u003c/li\u003e\n\u003cli\u003eAttacks by Iran-linked armed groups and the scope of U.S. and Israeli retaliation\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eAn attack on a single tanker or a one-day surge in oil prices is a serious event, but it does not immediately mean a full-scale war or a global economic crisis. What matters more is how long physical supply reductions and transportation disruptions persist.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#conclusion\" class=\"anchor\" id=\"conclusion\"\u003e\u003c/a\u003eConclusion\u003c/h2\u003e\n\u003cp\u003eIt is difficult to say that the solution to the U.S.–Iran conflict lies solely in Washington or solely in Tehran. U.S. domestic politics, Israel’s security judgments, Iran’s logic of regime survival, independent actions by regional armed groups, and mediation by Gulf states all help determine the outcome.\u003c/p\u003e\n\u003cp\u003eThe situation the global economy must guard against most is not a one-off missile strike itself but a prolonged disruption of shipping through the Strait of Hormuz. This could trigger a chain reaction in oil and LNG prices, maritime insurance premiums, exchange rates, consumer prices, and interest rates. However, the worst-case outcome should not be treated as a firm prediction; risks should instead be updated based on the triggers and real-time indicators for each scenario.\u003c/p\u003e\n","tags":["Strait of Hormuz","Global economy","Geopolitics","US and Iran","Global oil prices"],"faqs":[{"question":"Are the United States and Iran officially at war?","answer":"Whether they are at war must be assessed based on the point in time in question and the legal definition. Even if limited airstrikes, clashes between proxy forces, or maritime confrontations occur, that does not mean the two countries have formally declared war or are engaged in sustained, full-scale warfare. The latest government announcements and information from international organizations should be checked."},{"question":"Are U.S.-Iran nuclear negotiations failing solely because of the ballistic missile issue?","answer":"No. Ballistic missiles are a major issue, but uranium enrichment and IAEA verification, the sequence of lifting economic sanctions, regional armed groups, and the durability of an agreement also play a role. Even if an agreement is reached on one issue, the entire negotiation process may be halted because of another."},{"question":"Was the JCPOA an agreement that banned Iran's ballistic missiles?","answer":"The JCPOA centered on restrictions and verification of Iran's nuclear program and the related easing of sanctions. It was not an agreement to comprehensively eliminate Iran's ballistic missile capabilities, and related issues were also addressed separately in contexts such as United Nations Security Council Resolution 2231."},{"question":"Can Iran completely block the Strait of Hormuz?","answer":"Maintaining a complete, long-term blockade would entail major military and economic costs and an international response. However, even concerns about mines, the seizure of vessels, drone attacks, or insurers ceasing coverage could reduce maritime traffic and effectively cause serious shipping disruptions."},{"question":"Do international oil prices always continue to rise when conflict breaks out in the Middle East?","answer":"No. Prices may initially surge because of a risk premium, but those gains may diminish if there are no actual supply disruptions or the conflict quickly subsides. The longer-term direction depends on shipping disruptions, inventories, spare production capacity, the demand outlook, and releases from strategic reserves."},{"question":"How do disruptions in the Strait of Hormuz affect consumer prices?","answer":"If crude oil and LNG prices and marine insurance premiums rise, the costs of refining, power generation, transportation, and manufacturing increase. If companies pass these costs on through the prices of products and services, consumer prices rise, and it may become more difficult for central banks to lower interest rates."},{"question":"Do gas station prices in South Korea rise at the same time as international oil prices?","answer":"They do not move by the same amount at the same time. In addition to international oil prices, exchange rates, existing inventories, crude oil procurement contracts, refining margins, taxes, and fuel tax policies also play a role, resulting in a certain time lag and differences in prices."},{"question":"What are the most realistic signs of escalation to monitor?","answer":"A decline in vessel traffic, a surge in war-risk insurance premiums, shutdowns of oil production facilities, embassy evacuations, large-scale troop movements, and repeated direct attacks should be considered together. What matters is whether multiple indicators continue to deteriorate rather than any single incident."}],"sources":[{"url":"https://www.iaea.org/newscenter/focus/iran","title":"IAEA: Iran Nuclear Verification and Related Materials","type":"source"},{"url":"https://main.un.org/securitycouncil/en/content/2231/background","title":"Background Materials on United Nations Security Council Resolution 2231","type":"source"},{"url":"https://www.eia.gov/international/analysis/special-topics/Strait_of_Hormuz","title":"U.S. Energy Information Administration: Strait of Hormuz","type":"data_point"},{"url":"https://ofac.treasury.gov/sanctions-programs-and-country-information/iran-sanctions","title":"U.S. Department of the Treasury OFAC Iran Sanctions Information","type":"source"},{"url":"https://www.worldbank.org/en/research/commodity-markets","title":"World Bank Commodity Markets","type":"data_point"}],"images":[{"id":629,"url":"https://injoys.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6NzYzMSwicHVyIjoiYmxvYl9pZCJ9fQ==--4693a80204aab16e3a1935713c36ff143e9ea51a/ai-4a2397e0.webp","is_representative":true,"generation_method":"ai_image","license":"ai_generated","mime_type":"image/webp","translations":{"ko":{"alt":"사막 해협을 지나는 유조선과 화물선, 세계경제 부문, 상승 그래프를 담은 일러스트","caption":"해협의 충격이 에너지와 운송, 산업, 금융을 거쳐 세계경제로 확산되는 모습을 나타낸다.","description":null},"en":{"alt":"Tankers crossing a desert strait amid global economic sectors and a rising chart","caption":"The illustration shows a shock in a vital strait spreading through energy, transport, industry, finance, and the global economy.","description":null},"ja":{"alt":"砂漠の海峡を進むタンカーと貨物船、世界経済の各部門、上昇グラフのイラスト","caption":"重要海峡での衝撃がエネルギーや輸送、産業、金融を通じて世界経済へ波及する様子を示している。","description":null},"es":{"alt":"Petroleros cruzan un estrecho desértico entre sectores económicos y un gráfico al alza","caption":"La ilustración muestra cómo una crisis en un estrecho clave se propaga por la energía, el transporte, la industria, las finanzas y la economía mundial.","description":null},"id":{"alt":"Kapal tanker melintasi selat gurun di antara sektor ekonomi dan grafik yang menanjak","caption":"Ilustrasi ini menunjukkan guncangan di selat penting yang menyebar ke energi, transportasi, industri, keuangan, dan ekonomi dunia.","description":null},"pt":{"alt":"Petroleiros cruzam estreito desértico entre setores econômicos e gráfico em alta","caption":"A ilustração mostra um choque em um estreito estratégico se espalhando por energia, transporte, indústria, finanças e economia global.","description":null},"zh-hant":{"alt":"油輪與貨輪穿越沙漠海峽，周圍呈現全球經濟部門與上升走勢圖","caption":"圖中呈現關鍵海峽的衝擊如何透過能源、運輸、工業與金融擴散至全球經濟。","description":null},"de":{"alt":"Tanker durchqueren eine Wüstenmeerenge, umgeben von Wirtschaftssektoren und steigender Kurve","caption":"Die Illustration zeigt, wie sich ein Schock an einer strategischen Meerenge über Energie, Verkehr, Industrie und Finanzen auf die Weltwirtschaft ausbreitet.","description":null}}},{"id":630,"url":"https://injoys.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6NzYzNywicHVyIjoiYmxvYl9pZCJ9fQ==--8b75c90c9f5b4c9967c6451ec12e4b5f3db0ef88/ai-5c47d072.webp","is_representative":false,"generation_method":"ai_image","license":"ai_generated","mime_type":"image/webp","translations":{"ko":{"alt":"미국과 이란 사이 미사일·드론, 불타는 석유시설, 선박, 저울을 담은 지정학 인포그래픽","caption":"군사 충돌이 에너지와 해상 무역으로 번지는 경로를 상징적으로 보여준다.","description":null},"en":{"alt":"Geopolitical graphic of the US and Iran with missiles, drones, burning oil sites, ships, and scales","caption":"The illustration maps how military conflict could spread through energy supplies and maritime trade.","description":null},"ja":{"alt":"米国とイラン、ミサイル、無人機、炎上する石油施設、船、天秤を描いた地政学図","caption":"軍事衝突がエネルギー供給や海上貿易へ波及する経路を象徴的に示している。","description":null},"es":{"alt":"Gráfico geopolítico de EE. UU. e Irán con misiles, drones, petróleo en llamas, barcos y una balanza","caption":"La ilustración muestra cómo un conflicto militar podría afectar la energía y el comercio marítimo.","description":null},"id":{"alt":"Grafik geopolitik AS dan Iran dengan rudal, drone, fasilitas minyak terbakar, kapal, dan timbangan","caption":"Ilustrasi ini menunjukkan jalur dampak konflik militer terhadap energi dan perdagangan laut.","description":null},"pt":{"alt":"Gráfico geopolítico dos EUA e Irã com mísseis, drones, instalações de petróleo em chamas, navios e balança","caption":"A ilustração mostra como um conflito militar pode atingir a energia e o comércio marítimo.","description":null},"zh-hant":{"alt":"美國與伊朗、飛彈、無人機、燃燒的石油設施、船隻和天平構成的地緣政治圖解","caption":"圖解呈現軍事衝突如何透過能源供應與海上貿易向外擴散。","description":null},"de":{"alt":"Geopolitische Grafik zu USA und Iran mit Raketen, Drohnen, brennenden Ölanlagen, Schiffen und Waage","caption":"Die Grafik zeigt, wie ein Militärkonflikt Energieversorgung und Seehandel beeinträchtigen könnte.","description":null}}}],"published_at":"2026-08-14T05:34:35+09:00","updated_at":"2026-08-14T05:34:35+09:00","license":"cc_by","translation_status":"reviewed","available_locales":["ko","en","ja","es"],"data_locales":["ko","en","ja","es","id","pt","zh-hant","de"],"url":"https://injoys.com/en/articles/us-iran-conflict-risk-and-global-economic-scenarios"}