Iran’s ‘U.S. Investment Oil Fields’ Passage Impossible’; Lee Jae-myung’s Attempt to Pass through UAE Shah Oil Field Frustrated
Iran’s ‘U.S. Investment Oil Fields’ Passage Impossible’ shows frustration in Lee Jae-myung’s attempt to pass through the UAE Shah oil field.
President Lee dispatched Chief of Staff Kang Hoon-sik as a special envoy to sign an agreement for the import of crude oil from the Shah field, which the UAE developed with a $10 billion investment from the U.S. company Occidental. The plan to break through Iran’s blockade of the strait through the ‘movement of international strategic oil reserves’ has been thwarted, revealing a vicious cycle of high exchange rates and high oil prices within a bottlenecked economy.
On the 26th, Iranian Ambassador to South Korea Saeed Khouzechi stated during an appearance on CBS Radio that it is difficult for South Korean vessels trading with U.S. companies or utilizing Persian Gulf oil fields and energy facilities invested in by U.S. capital to pass through the Strait of Hormuz. On the 16th, Iran launched drone attacks on major oil fields and ports in Abu Dhabi, United Arab Emirates (UAE). The attack targeted the 'Shah' oil field in the southern desert region, where the U.S. has invested over $10 billion, causing a fire.
The new U.S.-funded oil field is a joint venture with the Abu Dhabi National Oil Corporation (ADNOC). During his visit to the UAE as a presidential envoy on the 18th, Chief of Staff Kang secured a promise of a "top priority supply" of 24 million barrels, stating this was in response to a blockade of the Strait of Hormuz; just prior to this, the UAE announced its "joint military cooperation to respond to Trump's blockade."
The Port of Fujairah, a pipeline-connected port located outside the UAE's eastern strait—where the Iranian attack is concentrated—which Chief Kang agreed to, had already suspended crude oil shipments due to drone attacks on the 18th and 20th. During a Blue House briefing following a four-day "unsoldiered" Tuksa expedition, Chief of Staff Kang stated, "We have agreed to sign a Memorandum of Understanding (MOU) on crude oil supply chain cooperation containing provisions for exploring alternative supply routes between the two countries, and we plan to sign it soon." By providing "supply guarantees" to restore shipments to UAE ports, which are currently unable to receive supplies, Korea has become a top priority participant in the Trump administration's efforts to "break the blockade on Iranian oil supply."
Upon actually agreeing to the signing of this agreement, Chief of Staff Kang announced on the 18th that "we have confirmed the emergency import of a total of 18 million barrels of crude oil," and Korean media outlets unanimously reported this as "securing oil supply," coordinating their falsification of the facts.
The Korea National Oil Corporation (KNOC) announced on the 25th that it is currently receiving 2 million barrels of crude oil, secured through an international joint stockpiling project with the UAE's Abu Dhabi National Oil Company (ADNOC), into its Yeosu oil storage facility.
Yonhap News reported on the 25th, “Some of the 24 million barrels of crude oil urgently secured from the United Arab Emirates (UAE) by the government to address supply instability caused by the blockade of the Strait of Hormuz has arrived in Korea,” adding, “The volume currently being received is part of the 24 million barrels that Kang Hoon-sik, Chief of Staff to the President, stated were urgently secured from the UAE.”
Yonhap News continued by stating, “Yang Ki-wook, Deputy Minister for Trade, Industry and Energy Security at the Ministry of Trade, Industry and Energy, previously stated during a briefing at the Government Complex Sejong on the 23rd that ‘of the 24 million barrels to be imported from the UAE, 4 million barrels will arrive in two shipments at the end of March and April 1, and the arrival of 18 million barrels is also scheduled to begin in early to mid-April.’”
The report further stated, “The International Joint Stockpiling Project is a system in which the Korea National Oil Corporation leases domestic storage facilities like warehouses to store crude oil and petroleum products from client companies, such as oil-producing nations, and allows Korea to exercise priority purchasing rights for these volumes in the event of an oil supply crisis.”
Director Kang stated that Korea had “promised ‘number one priority’ in the UAE,” noting that “the Strait of Hormuz is effectively blockaded.” He remarked that “to overcome the current energy crisis, it is urgent to secure crude oil through alternative supply lines rather than Hormuz,” thereby demonstrating a “priority supply pledge” as a strategy to “lift the Iranian blockade of the Strait of Hormuz.”
Anwar Gargash, Foreign Affairs Advisor to the President of the UAE, announced at an online event hosted by the Council on Foreign Relations (CFR) on the 17th that the UAE could join international efforts led by the United States to ensure the safety and security of the Strait of Hormuz. The U.S. State Department announced in a press release on the 17th that prior to this, U.S. Secretary of State Rubio held a phone call with UAE Deputy Prime Minister and Foreign Minister Abdullah bin Zayed Al Nahyan.
Reuters reported on the 26th, “Japan plans to mobilize $1.4 trillion in foreign exchange reserves and sell futures contracts to drive down oil prices and establish short positions in the oil futures market.”
The report added, “By curbing the demand for dollars to purchase oil, Tokyo can alleviate selling pressure on the yen. Recently, oil futures and currency markets have been moving in tandem, with rising oil prices and increased demand for the dollar as a safe haven asset due to conflicts in the Middle East.”
Japanese law permits the use of foreign exchange reserves, preserved as war funds for direct currency market intervention, to position themselves in the futures market for the purpose of stabilizing the yen. Japan has begun using its dollar reserves to resolve the double burden on the economy as crude oil prices rise further due to the high exchange rate (weak yen).
Reuters reported, “While there is no immediate clarity on which international platform Japan will intervene on, the NYMEX (WTI crude oil futures exchange), ICE (Brent crude futures trading), and Dubai futures will serve as benchmarks for Asia.”
The report added, “Like currency intervention, such operations are possible on any platform, and this measure will take place after Japan decided to partially release its own oil reserves in cooperation with the International Energy Agency (IAEA), a move intended to mitigate supply disruptions beginning to affect end users.”
Reuters continued, “Holding large short positions can also result in losses if the market continues to rise.” It noted, “Japan exhausted over $10 billion in foreign exchange reserves during its most recent currency intervention in 2024, and Tony Sycamore, a market analyst at Sydney IG, suggested that Japan would need to spend at least $10 billion to $20 billion to see a noticeable effect.”
The New York Times reported on the 25th regarding a "bottleneck economy" crisis characterized by a "currency crash caused by the double whammy of high oil prices and high exchange rates," stating that Asian nations such as India and South Korea are facing ominous side effects as they have emerged as countries vulnerable to persistent energy supply disruptions caused by the Persian Gulf, and that their currencies are being suffocated by the skyrocketing dollar.
The Lee Jae-myung administration seized the bottleneck in the "bottleneck economy" and caused stock prices to surge, which Chief Policy Advisor Kim Yong-bum described as a "boom economy that has seized the bottleneck."
The NYT described the state of the bottleneck economy, stating, "The Middle East war has effectively cut off the supply of oil and gas passing through the Strait of Hormuz, and this narrow waterway has become the most dangerous bottleneck in the world." It added, "The fighting has revealed a second painful bottleneck, and oil and gas, whose prices are skyrocketing and account for about 90% of international merchandise trade, use only U.S. currency."
The NYT continued, “As is often the case during times of global turmoil, investors are withdrawing funds from risky regions and pouring more into U.S. assets. This is causing the dollar to rise and approach its highest value against Asian currencies in the last 20 years.”
It added, “As a result, many currencies are weakening when purchasing power is most needed. The combined impact of these pressures has weakened economies across Asia, and with some local energy costs higher than global benchmark prices, stock investors are gripped by fear.”
Major Indian stock indices fell 2.5% on the 23rd, hours before President Trump announced a five-day postponement of plans to bomb Iranian energy infrastructure. They had fallen nearly 13% since the start of the war, and losses in the stock market led to capital outflows from India and a decline in the Indian rupee.
The South Korean won has pegged to the 1,500 won level against the dollar, reaching a level comparable to its lowest exchange rate since the 2008 global financial crisis.
The New York Times reported, “Both India and South Korea have seen signs of some easing in fiscal pressure over the past few days and are paying attention to signals that President Trump is seeking a path to end the war,” adding, “However, deeper risks are taking root.”
Because Asian countries purchase large amounts of oil from the Middle East, strong demand for the suddenly reduced supply has driven prices further up.
The greater blow occurs when those prices are converted into a country’s weakened currency, which is shrinking against the dollar.
The Indian rupee has been weak for the past year, despite the dollar itself falling against most currencies. Currently, one dollar is worth 93.2 rupees, 8% higher than a year ago.
The NYT explained the structure of the doubling in just one year, stating, “Indian buyers must now pay 14,748 rupees to obtain exactly the same energy they received for 6,087 rupees a year before the war,” and argued that the Lee Jae-myung administration has entered a high-inflation regime with a structure similar to India’s hyper-high inflation. Harvard economist Kenneth Rogoff told the NYT, "Rising oil prices are doubly painful when currencies are already weak."
Overspending on essential goods has become a harsh reality across Asia.
Currencies of countries that spend more on imports and reduce their profits from exports have fallen into a vicious cycle of losing value against the rest of the world.
The NYT reported, "As anxious investors shift capital to the dollar, traditionally the safest store of value, struggling, weakened currencies are depreciating further." It noted, "The Thai baht showed a stronger foundation than the Indian rupee this year, but recently fell rapidly to a 10-month low and is expected to continue declining as long as the war persists.
While Thailand's tourism and export industries usually benefit from weakness, this time the currency is falling further as vacations are canceled due to anxiety about global travel." Jahangir Aziz, an economist at JPMorgan Chase in New York, told the NYT, "The question for any country is how it wants to absorb the blow," adding, "It is time for governments and central banks to make decisions on who will suffer the most damage."
Regarding the question of "how to best distribute the pain," which is a concern for insecure governments, the Lee Jae-myung administration has concretized a policy of "real estate tax increases."
On the 5th, Kim Yong-beom, Chief of Policy, spoke under the title "Korea Inc., Time for Re-evaluation," stating, "Korea Inc. is not becoming expensive right now, but is in the process of shedding the shackles of undervaluation that have been imposed over it for decades, one by one."
He described Korea as "a unique nation that has simultaneously grasped several key bottlenecks of the global industry" regarding the "four industries: AI memory, LNG carriers, ultra-high voltage power equipment, and defense." Regarding the Korean stock market, he predicted "further stock price increases," noting that "internally, increased dividends, share buybacks, and growing shareholder activism are driving corporate governance reform in earnest; while it is just the beginning, the direction is clear."
See <Japan: ‘Diplomacy First’ on Trump’s Mine Countermeasure Ship; Lee Jae-myung: ‘Deployment for UAE Deal Escort’, March 18, 2026>
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<Japan War: Amazon Targeted at Data Centers, ‘Lack of’ Recovery System; Lee Jae-myung: ‘Bottleneck Economy’, March 14, 2026>
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