iShares MSCI South Korea ETF Drops 12.5% on Hormuz Supply Blockade
iShares MSCI South Korea ETF has fallen 12.54% since Feb. 27 close after Iran closed the Strait of Hormuz, through which South Korea imports almost all crude oil and a significant share of LNG. This makes it the worst-performing major country ETF.
1. Military Escalation and Strait of Hormuz Closure
The U.S. and Israel launched a joint military operation against Iran, targeting senior regime figures and energy infrastructure. Iran responded with strikes on U.S. bases and declared the Strait of Hormuz closed, cutting off a passage that carries around 20% of global crude and LNG flows.
2. Oil Price Surge and Financial Measures
Oil prices jumped 13% over two trading sessions, the largest two-day surge since March 2022. Political risk insurance was ordered for Gulf maritime trade and naval escort readiness was announced to secure tanker transits.
3. South Korea's Energy Import Dependence
South Korea imports nearly all of its crude oil and a significant share of its LNG through the Strait of Hormuz. The closure has intensified supply concerns and raised the cost of energy for the country’s economy.
4. EWY ETF's Performance Impact
The iShares MSCI South Korea ETF plunged 12.54% since the Feb. 27 close, making it the worst-performing major country ETF. The steep drop reflects South Korea’s acute exposure to the disrupted energy supply routes around the Gulf.