Seoul: The South Korean currency declined against the U.S. dollar on Thursday as global oil prices surged, fueled by concerns over supply disruptions due to escalating tensions in the Middle East. The won commenced trading at 1,480.1 per dollar, marking a decrease of 13.6 won from the previous session.

According to Yonhap News Agency, the currency had experienced an increase over the past two sessions, recovering from a 17-year low. This recovery followed U.S. President Donald Trump's indication that the conflict in the Middle East might soon conclude, alongside signs of stabilization in global oil prices. However, the won's value diminished again as global oil prices rose when Iran effectively obstructed cargo movement through the Strait of Hormuz. Iran's actions included firing on commercial ships and targeting Dubai International Airport, intensifying efforts to disrupt traffic in the oil-rich Persian Gulf.

The rise in oil prices persisted despite the International Energy Agency's decision to release its largest-ever oil stockpile of 400 million barrels to offset supply disruptions. Additionally, the United States announced plans to release 172 million barrels from its Strategic Petroleum Reserve starting next week.

Foreign exchange and stock markets have witnessed high volatility since last week as the U.S.-Israeli attacks on Iran have heightened tensions across the broader region. Increased oil prices exert downward pressure on the Korean won as they elevate the country's demand for dollars to purchase crude imports, given South Korea's heavy reliance on energy imports.

Reflecting the global uncertainty, the benchmark Korea Composite Stock Price Index (KOSPI) opened 0.75 percent lower at 5,567.65 on Thursday, mirroring overnight losses on Wall Street amid concerns over a prolonged conflict.