The Strait of Hormuz is one of the most strategically important energy transportation routes in the world. If the strait were closed due to geopolitical tensions, the impact would not be limited to Japan and South Korea but would extend to the Global Economy, affecting energy prices, financial markets, and national monetary policies.
First, the most immediate impact would be rising oil and natural gas prices, which would increase global production and transportation costs, further driving Inflation. Higher energy prices often lead to rising costs in food, transportation, and manufacturing, which are ultimately passed on to consumers, creating broad price pressures.
Second, energy supply risks may accelerate the pace of Energy Transition. To reduce dependence on Middle East energy routes, countries may increase investment in renewable energy, nuclear power, electric vehicles, and energy storage technologies. Over the long term, this may reshape global energy structures and investment directions.
Meanwhile, the closure of the Strait of Hormuz typically raises Geopolitical Risk. When geopolitical risk rises, global financial markets often experience increased volatility, investor risk appetite declines, and capital flows shift from equities and high-risk assets toward safer investments.
In such scenarios, demand for Safe-Haven Assets usually increases, including gold, the U.S. dollar, and U.S. Treasury bonds. Historical experience shows that during geopolitical conflicts or energy crises, safe-haven assets tend to perform well and attract major capital inflows.
Additionally, heightened market risk aversion often strengthens US Dollar and Gold simultaneously. The U.S. dollar typically appreciates due to its liquidity and safety, while gold benefits from its safe-haven properties. During energy crises or geopolitical conflicts, both become focal assets for investors.
In conclusion, the closure of the Strait of Hormuz would not only impact the energy market but also transmit effects through energy prices, inflation, financial markets, and safe-haven assets to the Global Economy. Investors need to closely monitor global economic trends, energy prices, and safe-haven asset movements to adjust investment strategies and manage risk in uncertain environments.
