Seoul: The South Korean won weakened against the U.S. dollar Monday, following a renewed threat from U.S. President Donald Trump to strike Iranian energy facilities and bridges if the strategic Strait of Hormuz is not reopened. Trump set a new deadline for action, which has heightened economic uncertainties in South Korea.

According to Yonhap News Agency, the won closed at 1,506.3 per dollar, marking a decrease of 1.1 won from the previous session. Initially, the currency opened at 1,510.3 won on Monday but managed to regain some ground after reports emerged about potential talks between the United States and Iran. These discussions involve a proposed 45-day ceasefire as part of a two-phase deal that could lead to a permanent resolution of the ongoing conflict.

The South Korean currency has experienced increased volatility in recent sessions, staying below the critical 1,500 won threshold. The ongoing conflict in the Middle East, which began in late February, has caused global oil prices to rise, raising concerns about inflation and a potential economic downturn. On Sunday, U.S. time, President Trump warned that Iran would "be living in hell" if it failed to reopen the vital waterway, extending his deadline for resolution to 8 p.m. Tuesday.

The escalating tensions have further driven up crude prices due to supply concerns, with Brent and West Texas Intermediate (WTI) surpassing US$110 per barrel. The surge in oil prices has put additional pressure on the won by increasing the demand for dollars for crude imports, as South Korea heavily depends on energy imports. Moon Jeong-hee, an economist at KB Kookmin Bank, noted that even if a deal is reached, high oil prices are expected to persist in the first half of the year, likely keeping the local currency around the 1,500 won level.

Despite the instability in the Middle East, the Korea Composite Stock Price Index (KOSPI) showed resilience, rising 1.36 percent to 5,450.33 on Monday, buoyed by strong institutional buying.