South Korea’s economic resilience during 2026 energy crisis

Prof Dr M Munir 2026 US-Iran war and blockade of Strait of Hormuz led to impulsive disruptions in the price of global energy supply resulting in economic instability both in the global north and global south. The war generated inflation pressures, currency depreciation and stock market instability. South Korea was supposed to be one of most affected country from the energy supply crisis as its 70% crude oil and 30 % Gas/LNG supplies are from Middles East. But, conversely to this assumption, South Korea demonstrated an astounding resilience in the face of the 2026 global energy supply challenges. The main focus of this study is to analyses how South Korea sustained its economic resilience vis-à-vis global energy crisis. South Korea managed to withstand the 2026 energy shock without losing macroeconomic stability, as its GDP growth remained steady. Despite the global energy crisis, the IMF projected South Korea’s growth at 1.9%, slightly higher than the OECD forecast of 1.7%, reflecting strong resilience. The trade performance was particularly impressive, with exports reaching a record $87.75 billion in May 2026 and expected to surpass $900 billion by year’s end. A global surge in artificial intelligence demand significantly boosted semiconductor exports, with DRAM shipments nearly tripling and semiconductors alone generating $37.16 billion, a 169.4% increase. The five-month trade surplus reached $101.9 billion, exceeding the previous 2017 record. This performance illustrates how South Korea’s economy remained stable amid crisis, driven by a semiconductor boom, strong government intervention and a diversified export base. Overall, tech-led exports and policy buffers helped prevent a severe recession despite global energy disruptions. Several factors contributed to South Korea’s sustained economic resilience amid Middle East energy disruptions. The first and most significant factor was strong technology-driven exports, particularly in semiconductors and AI hardware. Gl