Credit: Public domain.
The US-Israel attack on Iran directly impacted the South Korean economy, as 54.2% of its petroleum import passes through the Strait of Hormuz that is blocked because of the conflict. The cost of gasoline in Korea immediately shot up this week as some have used the news as an opportunity to raise the price, although a supply shock usually takes two to three weeks before being reflected at gas stations.
The price hike prompted the Korea Fair Trade Commission 공정거래위원회 to warn against price-fixing and collusion. The administration is weighing on implementing a price cap for gasoline, which would be the first such price control since 1997.
South Korea’s stock market - a toast of the town just a week ago - took a pummeling as well. The KOSPI index dropped by 12.06% on March 4, the largest fall in history topping the drop of 12.02% on September 12, 2001, immediately following the terrorist attacks in the United States. In the next several days, the KOSPI index went through a roller coaster ride of high variance, rising by 9% on March 5 then falling again by 6% on March 6.
