Geopolitical Storms and Stock Market Collapse—Global Shocks on Two Fronts

From late February to early March 2026, global markets experienced intense turbulence on two simultaneous fronts.

One front was in the Middle East’s Strait of Hormuz, where Iran blocked global energy arteries, causing oil prices to soar and shipping to halt. The other front was in Seoul, South Korea’s financial hub, where the KOSPI index recorded its largest single-day decline in history, foreign capital withdrew decisively, and leveraged positions were liquidated in a chain reaction.

These two fronts, seemingly thousands of miles apart, are actually closely interconnected.

First Front: The Breakdown of Energy Supply Routes

The Strait of Hormuz accounts for about 20% of global oil transportation and roughly 20% of liquefied natural gas supplies. When Iran announced the blockade and prohibited any ships from passing, the global energy supply chain was instantly choked. International oil prices surged by 13%, with Brent crude surpassing $82 per barrel. Analysts predict that if the blockade persists, prices could hit $100 or even $120.

Shipping costs soared accordingly. Maersk rerouted around the Cape of Good Hope, Hapag-Lloyd suspended transit, and war risk surcharges were introduced. The global logistics supply chain faced a new wave of disruptions, and panic buying began to emerge.

Second Front: The Burst of the Stock Market Bubble

The collapse of the Korean stock market is a direct reflection of the energy supply disruption transmission chain.

South Korea is the world’s second-largest oil importer and a highly dependent economy on Middle Eastern energy. Rising oil prices directly increased transportation, logistics, and chemical raw material costs, squeezing manufacturing profits. The core drivers of the Korean stock market—Samsung Electronics and SK Hynix—are semiconductor giants highly sensitive to energy costs.

As foreign investors began to calculate the impact of “high oil prices + high interest rates” on chip company profits, withdrawal became the rational choice. On March 3, foreign net sales exceeded 5 trillion won, with Samsung Electronics and SK Hynix alone facing over 4 trillion won in sell-offs. Coupled with forced liquidations of margin positions, a stampede was unavoidable.

Fibonacci Asset Management CEO Zheng Renyun succinctly pointed out: “If the Iran conflict persists, it could keep crude oil prices high, intensify inflation risks, and complicate the Federal Reserve’s rate cut path. This macro environment is suppressing stocks related to AI, which are already overvalued, and making their valuations more sensitive to changes in interest rates and liquidity expectations.”

Convergence of the Two Fronts

The blockade of the Strait of Hormuz and the collapse of the Korean stock market completed a logical loop at the same point in time.

Geopolitical conflict pushes oil prices higher → rising oil prices boost inflation → inflation constrains rate cuts → high interest rates suppress tech stock valuations → foreign capital withdraws → leveraged positions are liquidated → stock market crashes. This is a transmission chain from the Persian Gulf to Seoul, and a true reflection of the era of global market integration.

Professor Lin Boqiang of Xiamen University pointed out that this shift indicates that even if the fundamentals of supply and demand remain unchanged, uncertainties in transportation can amplify price fluctuations and impact global trade. For economies highly dependent on a single energy corridor and a single industrial engine, such shocks are especially deadly. $GT

The shocks on both fronts are still ongoing. When will the blockade of the Strait of Hormuz be lifted? Where is the bottom of the Korean stock market? The answers depend on two variables: the intensity of the conflict and the speed of confidence recovery. #美伊局勢影響