Warning from Hormuz: Time to redesign energy security

Ultimately, what Korea needs is a stable control tower for energy security and continuous management led by experts. If industrial policy, environmental policy and foreign policy move separately, energy security cannot function effectively.

Lee Jae-seung

The author is a professor of international studies at Korea University and head of the Ilmin International Relations Institute.

As the conflict involving Iran intensifies, one of the most sensitive warning lights in the global energy market has begun flashing. The Strait of Hormuz, through which roughly 20 percent of the world’s seaborne crude oil shipments pass, can trigger immediate disruption in global energy supply whenever a crisis occurs. It is also a crucial gateway for the energy that flows into the Korean economy.

A Luojiashan tanker sits anchored in Muscat, as Iran vows to close the Strait of Hormuz, amid the U.S.-Israeli conflict with Iran, in Muscat, Oman, on March 7. [REUTERS/YONHAP]

Following the United States’ shale revolution, the global energy market entered a period of relatively stable supply conditions. Geopolitical risks, which once caused long-lasting disruptions, no longer translated as easily into sustained shocks. Major economies were able to focus their attention on carbon neutrality and energy transition under these circumstances.

Yet the Russia—Ukraine war and renewed tensions in the Middle East have revealed that this stable supply environment was never permanent. The relative calm of the past decade now appears closer to an illusion than a durable reality.

Fuel prices are displayed at a gas station in Seoul on March 9 as global oil prices surpassed $100 per barrel following disruptions linked to the Strait of Hormuz. [JOONGANG ILBO]

One of the most significant changes lies in the position of the United States. Since the end of the Cold War, the United States has effectively acted as a guarantor of energy supply stability in the Middle East. Following the Carter Doctrine, the energy resources of the Persian Gulf were treated as a vital interest of the United States, and the U.S. Navy played a central role in safeguarding navigation through the Strait of Hormuz.

However, as the United States has approached energy self-sufficiency, instability in the Middle East no longer constitutes a direct threat to the U.S. energy supply. The security umbrella that Washington once provided for global energy markets can no longer be assumed to open automatically.

For Korea, whose energy supply structure is effectively isolated like that of an island, this change carries particular significance. Maintaining a top-10 global economy, an advanced manufacturing base and emerging industries such as AI data centers requires Korea strengthen its own capacity for energy security.

This goal cannot be achieved by focusing solely on a single energy source or short-term price stability. Energy security must be assessed through the resilience of the entire energy system.

An energy system can be compared to a football team. Each position performs a different role. Renewable energy, widely viewed as the future of the sector, resembles the attacking line. Coal and nuclear power, which have traditionally provided baseload electricity, function as defenders. Natural gas, capable of adjusting output quickly, plays a role similar to that of midfielders. Oil remains central to industry and logistics.

A team can win only when every position performs its role effectively. Coordinating these roles is the responsibility of the government.

Energy policy and environmental policy share the common objective of addressing climate change, yet they operate on different principles. Environmental policy is based on protection grounded in norms, while energy policy must prioritize practical use and supply management.

Recognizing this difference is essential to preventing policy distortions. Energy transition and energy security must function as complementary goals rather than competing agendas.

Korea’s energy system is currently facing pressure from two sides at once: industrial restructuring and the financial strain on state-run energy companies. Intensifying global competition, oversupply in certain markets and changes in energy demand are accelerating structural adjustments in the oil industry.

The Korea National Oil Corporation continues to face serious financial difficulties. The Korea Gas Corp. holds receivables of roughly 14 trillion won ($9.56 billion), while Korea Electric Power Corporation’s debt has surpassed 200 trillion won.

Accumulating the cost of energy policy within state-owned companies ultimately places a burden on the national economy as a whole.

Coal is expected to decline over the long term, yet the closure of aging coal-fired power plants is already raising concerns about employment and regional economic stability. The social costs associated with what policymakers call a “just transition” are likely to increase rapidly.

Nuclear power faces its own challenges. Policy inconsistency has been evident in how Korea first moved away from nuclear energy and later reversed course. The issue of spent nuclear fuel storage also remains unresolved, and the commercialization of small modular reactors will take time.

Energy security is what allows a system to withstand external supply shocks. Even while pursuing energy transition, policymakers must realistically assess the role of each energy source and strengthen the system’s overall resilience.

During periods of rising global oil prices, measures such as price controls or adjustments to fuel taxes may temporarily reduce consumer burdens. However, repeated intervention risks weakening market signals and discouraging investment.

The more energy prices become influenced by political considerations, the greater the potential burden on industrial competitiveness.

Energy security rarely attracts attention. Much of the work involves quietly filling gaps in the system. It means reviewing supply chains, managing contract structures, maintaining reserves and protecting industrial competitiveness.

Industry Minister Kim Jung-kwan, second from left, speaks at a meeting with officials at major oil refineries in Seoul on March 9. [NEWS1]

It is not the realm of dramatic policy announcements but of careful, sustained management. For that reason, political impatience and symbolic gestures pose the greatest risks to energy security.

Korea’s past failures in overseas resource development illustrate this lesson. The problem was not a lack of ambition but excessive emphasis on political achievements. The international energy market is a complex arena where politics, security, finance and technology intersect. When energy policy becomes an occasion for political spectacle, negotiating power can quickly erode.

Ultimately, what Korea needs is a stable control tower for energy security and continuous management led by experts. If industrial policy, environmental policy and foreign policy move separately, energy security cannot function effectively.

The tension surrounding the Strait of Hormuz is a warning. A risk once considered unlikely has now become reality. This is the moment for Korea to redesign its energy security strategy, maintaining the competitiveness of diverse energy sources while strengthening international cooperation.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.