Hormuz Strait Crisis Escalates: Geopolitical and Economic Shifts Triggered by Israel-Iran Conflict

Israel's large-scale airstrikes

On June 13, 2025, Israel launched a large-scale airstrike against Iran's major military and nuclear facilities through an operation called 'Operation Rising Lion.' This attack has severely exacerbated maritime security concerns in the Middle East, particularly around the Strait of Hormuz, and is having a significant impact on the international community as a whole. Israel's assault is not just a military operation but also triggers international tensions, highlighting the complex issues of security and economy.

Iran's reaction and threats of blockade

Immediately after the attack on Israel, Iran issued a warning of 'severe retaliation.' It also hinted at the possibility of blocking maritime logistics through the Strait of Hormuz, adding to the seriousness of the situation. The Strait of Hormuz is a critical route, accounting for approximately 20% of global maritime oil transportation. If Iran's backlash goes beyond mere rhetoric and leads to concrete actions, it could have serious implications for global energy markets and supply chains. In particular, Iran's threat of a blockade could cause a spike in energy prices in the short term and lead to the persistence of geopolitical risk premiums in the medium to long term.

Strengthening the response of the international community

Considering the seriousness of the situation, the United Kingdom Marine Trade Operations (UKMTO) issued a notice on June 11, warning vessels to exercise caution in the Strait of Hormuz and surrounding waters. They recommend strengthening vigilance against GPS disruptions and suspicious activities, and suggest rerouting or evacuation measures if necessary. The International Maritime Security Construct (IMSC), led by the United States, is intensifying its vigilance and defensive operations across the Persian Gulf, and the potential expansion of operations under the name 'CTF Sentinel' has also been raised. This is interpreted as an essential measure for actual crisis response, beyond mere diplomatic vigilance.

Economic Shock: Turmoil in Oil Prices, Financial Markets, and the Shipping Industry

The instability of the Hormuz Strait has been immediately reflected in international oil prices. Following the airstrikes, WTI rose by up to 14%, while Brent crude surged over 10%, trading around the 72-73 dollar range. This cannot be interpreted merely as supply and demand concerns it indicates that the market recognizes it as a structural risk reflecting the possibility of a blockade in the strait. Financial markets also showed significant volatility, with key stock indices in the U.S., Europe, and Asia declining, while traditional safe assets like gold and U.S. Treasuries demonstrated strength. In contrast, the shipping industry reflects this situation, as major shipping companies recorded nearly a 13% increase.

Future Outlook: Coexistence of Short-Term Disruptions and Structural Risks

The coming weeks are likely to see continued heightened tensions. If Iran takes concrete actions such as blocking the Strait or attacking vessels, oil prices will rise further, and marine insurance premiums and shipping rates will also increase sharply. This could lead to substantial costs being passed on to the global supply chain, creating significant burdens on consumer price inflation as well as the policies of central banks and governments. This situation illustrates how deeply geopolitical risks are intertwined with the real economy and financial markets, and in the medium to long term, a decoupling of the global supply chain from the Middle East, diversification of energy sources, and restructuring of maritime security cooperation will be inevitable.

Conclusion: The Far-Reaching Impact of Military Conflicts

The military conflict between Israel and Iran extends beyond a simple bilateral dispute, causing significant shockwaves in international maritime security, the energy market, and the global financial order. In particular, the Strait of Hormuz acts as a vital economic link, and the tensions surrounding the stability of this region will remain an important variable in the future international order. In this situation, it is clear that governments around the world need to adopt a more strategic approach to geopolitical risks while seeking new energy strategies and maritime safety cooperation.