- The Iran war exposed South Korea’s energy vulnerabilities.
- Seoul is shifting from autonomy to managed interdependence.
- AI ambitions are intensifying the country’s energy-security dilemma.
The Iran war has given South Korea an unusually sharp stress test. More than 70 per cent of the country’s energy imports transit through the Strait of Hormuz, while Seoul imports over 93 per cent of the energy it consumes. Disruption in the Gulf therefore threatens more than energy prices: it can quickly reach the won, financial markets and the industrial supply chains on which South Korea’s export economy depends.
Seoul’s response points to a broader change in how it understands economic security. In the short term, the government accumulated oil reserves, diversified crude and naphtha suppliers and intervened to contain domestic energy prices. Its longer-term strategy goes further, expanding strategic inventories, supporting overseas investment in mining and processing, strengthening supply-chain financing and giving the Korea Investment Corporation a more active role in securing access to critical commodities.
This is not strategic autonomy in the conventional sense. South Korea cannot realistically eliminate its external dependencies. Instead, it appears to be pursuing managed interdependence: replacing concentrated exposure with a wider network of suppliers, strategic reserves and overseas assets.
Such resilience carries a price. The economic model built around efficiency rewarded concentrated supply chains, low inventories and access to the cheapest supplier. The emerging model deliberately introduces redundancy. Alternative suppliers, commodity stockpiles and preferential supply rights effectively become an insurance premium against geopolitical disruption.
Yet South Korea’s technological ambitions are creating a second dilemma. Seoul is simultaneously betting on semiconductors and artificial intelligence as the engines of future growth. Planned AI data centres could reach 18.4 gigawatts of capacity by 2035, while new semiconductor factories will add further pressure to the electricity system. Combined electricity demand from these projects has been estimated at 216.4 terawatt-hours — exceeding the projected increase in national consumption between 2024 and 2038.
The paradox is clear: South Korea’s response to energy vulnerability is an industrial strategy that will require substantially more energy.
This helps explain why nuclear power, grid infrastructure and access to critical minerals are becoming inseparable from Seoul’s technology policy. AI competitiveness can no longer be treated simply as a question of chips, computing capacity or investment. It increasingly depends on the physical systems beneath them.
The Iran war may therefore accelerate a deeper reordering of South Korean strategy. Diversifying away from Hormuz can reduce one concentration risk, while greater dependence on critical-mineral supply chains — including those dominated by China — can create another. Seoul’s emerging approach reflects that constraint. Economic resilience does not eliminate dependency. It redistributes it.
