The United States and Israel, and Iran, have agreed to a two-week truce. With Iran set to open the Strait of Hormuz during the truce, the flow of crude and other logistics has been unblocked. But this is not the end. Attention should turn to the outcome of talks the United States and Iran will hold starting on the 10th (local time). Even if the war ends, the Korean economy is expected to feel a significant impact. Dots Lines Planes lays out why today.

The USIran truce was struck just over 90 minutes before the time ‘8 p.m., April 7 (9 a.m. yesterday Korea time)’ that US President Donald Trump had signaled for obliterating Iran. In response to Pakistan's request to hold off on an attack, the United States agreed on the condition of ‘Iran opening the Strait of Hormuz’. Iran, after China's last-minute involvement, accepted the truce proposal. Israel also decided to join the truce.

Until just before the deal, a truce did not look easy. Both the United States and Iran had taken hardline positions. Earlier, at a press conference on the 1st, President Trump said “return Iran to the Stone Age,” and on the 7th he threatened, “tonight an entire civilization will disappear and never be able to return.” The US outlet Politico also reported that “concerns are being raised about the worst-case scenario of President Trump using nuclear weapons on Iran.”

Iran also signaled it would not back down. On the 7th, Iranian President Masoud Pezeshkian stated on X that “more than 14 million Iranians so far have declared they are ready to give their lives to defend the country.” In response to the government's proposal to form a ‘human chain’ around power plants to counter US bombing, hundreds of citizens actually gathered.

It was Pakistan that stepped in to mediate as the situation hurtled toward catastrophe. This was helped by Pakistan having long maintained good relations with both Iran and the United States. On the 24th of last month, the United States conveyed 15 demands for ending the war via Pakistan, and on the 6th Iran replied with 10 conditions. Trkiye, Egypt, and others also helped ease tensions.

China's involvement also lay behind Iran's last-minute acceptance of a truce proposal. Iran and China maintain close ties around ‘anti-US’ alignment. China had held back from active involvement, expecting this war to weaken US power. But as the closure of the Strait of Hormuz dragged on and a global energy and logistics crisis emerged, the economic burden grew more than expected, prompting action.

The truce is expected to bring a tailwind to the global economy. Immediately, passage has opened for tankers that had been stuck in the Strait of Hormuz, including 26 Korean ships. According to AFP, Iran said it would guarantee safe passage for vessels transiting the Strait of Hormuz for two weeks.

There is also a green light for the Korean economy. Yesterday (the 8th), the KOSPI, buoyed by a surge in large-cap stocks, climbed more than 7 percentage points to regain the 5,800 level. International oil prices fell more than 15%, dropping below $100 per barrel. Domestic fuel prices yesterday stood at 1,978 KRW per ℓ, up 10 KRW from the 7th, but they are expected to calm gradually. Jet fuel prices and fuel surcharges, which are linked to international oil prices, may also come down.

Some, however, say it is too early to be optimistic until full reopening of the Strait of Hormuz is confirmed. Iran's ‘10 conditions for ending the war’ include recognition of control over the Strait of Hormuz. If that is accepted and Iran starts collecting a toll, higher logistics costs will be unavoidable. The United States, which has low dependence on the Strait of Hormuz, may not consider this very seriously.

In fact, President Trump mentioned opening the Strait of Hormuz on Truth Social yesterday, writing, “enormous economic benefits will be created, and Iran can begin the rebuilding process.” This is being read as hinting that the United States may accept the ‘use of a Strait of Hormuz toll as rebuilding funds’. If realized, countries with high dependence on Middle Eastern energy, such as Korea, will have to bear higher costs.

Israel, which has joined the truce but remains lukewarm, is another variable. Even after the truce announcement, Israeli drones continued to fly over Beirut, Lebanon. There are concerns that Israeli Prime Minister Benjamin Netanyahu, under political pressure including calls for early elecions, could use the war to extend his political life. If Israel attempts a provocation, the truce and talks will be put at risk.

A hard-won truce has been achieved. The United States and Iran will begin end-of-war talks in Pakistan on the 10th. As Song Du-yul, former sociology professor at Germany's Munster University, pointed out in a column, what the United States may be facing through this war is “not the ‘threshold of victory’ but the ‘limits of empire’.” With it now clear that hegemony alone cannot guarantee peace, it is time to break the cycle of violence.

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