The ongoing standoff between the US and Iran, particularly surrounding the strategic Hormuz Strait, has intensified, causing international oil prices to exceed $100 per barrel. A recent US airstrike on Iran's military facilities on the Kharg Island, which is crucial for Iranian oil exports, has further escalated tensions without targeting the infrastructure directly, indicating that both nations are using these strategic points as leverage against each other. The expectations that the conflict would soon find a resolution are fading as signs suggest a drift toward a prolonged conflict, raising fears of an economic fallout due to persistent high oil prices.

The possibility of an extended conflict heightens concerns about long-term energy shocks affecting global oil prices. Financial projections suggest that if hostilities continue for three to four months, prices could rise to over $120 per barrel, and potentially exceed $150 if the conflict lasts for six months or more. Additionally, any Iranian actions to obstruct the flow through the Strait by laying mines would exacerbate the situation, leading to uncontrollable price surges that could have widespread ramifications on the global economy and particularly on domestic consumers.

In response to the current economic crisis, South Korea has recently implemented a price cap on fuel, which led to a slight decrease in domestic gasoline prices. However, experts suggest that this cap is not a sustainable solution to counter prolonged high prices. The government is urged to prepare measures to reduce energy demand, such as introducing a vehicle number plate system to manage fuel consumption. Furthermore, policies focusing on immediate relief for small businesses affected by energy costs should be prioritized, and the government is advised to expedite the establishment of supplementary budgets to prepare for the potential economic impact of ongoing tensions in the Middle East.