Seoul: The South Korean won weakened against the U.S. dollar on Monday amid escalating tensions in the Middle East, highlighting growing concerns over potential disruptions to global oil supplies. The won closed at 1,515.7 per dollar, declining by 6.8 won from the previous session, marking the fourth consecutive session of losses.

According to Yonhap News Agency, the conflict in the Middle East, which began in late February following U.S.-Israeli strikes on Iran, has expanded into a wider regional crisis. Over the weekend, Iran-backed Houthi militants in Yemen launched missiles at Israel, warning of continued operations until attacks on Iran cease. This development raises the possibility of further disruptions to global oil shipments if the Houthis target vessels in the Red Sea, a key route for oil and liquefied natural gas (LNG) transportation.

U.S. President Donald Trump mentioned that negotiations with Iran to end the conflict are ongoing; however, the deployment of thousands of U.S. troops to the region has led to fears of ground operations. As a result, the U.S. dollar continued its upward trend, driven by risk-off sentiment.

The dollar index, which measures the greenback against six major currencies, increased to 100.306, marking its fifth consecutive session of gains. The won, which has been hovering around the critical 1,500 level, dropped to as low as 1,517.3 on March 23, reaching its weakest level in 17 years.

Lee Yoo-jung, an analyst at Hana Bank, commented, "The standoff between the U.S. and Iran shows no signs of a breakthrough. Concerns that the Middle East crisis could become prolonged are weighing on the market. Rising global oil prices and heightened risk-off sentiment are likely to put additional pressure on the local currency, while foreign investors' fund outflows are also adding to the weakness of the Korean won."

Additionally, the benchmark Korea Composite Stock Price Index (KOSPI) fell by 2.91 percent to 5,277.3 on Monday, amid heavy selling by offshore investors.