Defense, refinery, shipping firms expected to gain from Iran crisis

Saudi Arabia's defense ministry officials look around LIG Nex1's exhibition booth during the World Defense Show 2026 in Riyadh, Saudi Arabia, Feb. 8. Courtesy of LIG Nex1

Intensifying tensions in the Middle East following U.S. and Israeli military strikes on Iran, which killed Iranian Supreme Leader Ayatollah Ali Khamenei, have not only raised concerns about potential impacts on the Korean economy but also lifted investor sentiment toward several key sectors.

With expectations that the ongoing conflict in the oil-rich region could disrupt shipments through the Strait of Hormuz, investors in the Korean stock market bet on defense, refinery and shipping firms on Tuesday, the first trading day since the war started.

LIG Nex1 hit the daily upper price limit at 661,000 won ($451), driven mainly by expectations for its M-SAM II mid-range surface-to-air missiles. The company has already supplied the system to Saudi Arabia and the United Arab Emirates, both now under retaliatory attack from Iran targeting Arab allies of the United States.

Other major Korean defense companies, including Hanwha Systems, Hanwha Aerospace, Hyundai Rotem and Poongsan, also saw sharp gains.

Hana Securities analyst Chae Un-sam said a potential shortage of missiles capable of intercepting Iranian ballistic attacks could boost demand for the M-SAM II, which he described as a cost-effective alternative to the U.S. Patriot missile system.

“Even if the war ends sooner than expected, Middle Eastern countries are likely to increase arms imports to prepare for continued uncertainty in the region,” Chae said.

Workers evacuate the area around a Saudi Aramco oil refinery following a reported Iranian drone strike in Ras Tanura, Saudi Arabia, in this still image obtained from a video released on social media on Monday. Reuters-Yonhap

In the refinery sector, S-Oil’s stock jumped 28.45 percent to 141,300 won from 110,000 won on expectations that higher global oil prices will improve refining margins.

Joong Ang Enervis and Hung-gu Oil, both selling petroleum in the domestic market, also hit their daily upper price limits.

“S-Oil’s operation of refining facilities in a war-free Asian region gives it a geopolitical advantage amid the crisis,” Samsung Securities analyst Cho Hyun-ryul said.

Shipping firms are expected to see higher revenues if disruptions to the Strait of Hormuz drive up freight rates. The Korea International Trade Association warned that shipping costs on rerouted paths, including routes through major ports in Oman, could rise 50 to 80 percent.

Reflecting those expectations, shares of STX Green Logis, Heung-A Shipping and Korea Line also hit their upper limits, while HMM and Pan Ocean saw steep climbs.

“Disruptions to sea routes generally lead to higher freight rates,” KB Securities analyst Kang Sung-jin said. “Given the sharp rise in costs for using very large crude carriers, shipping companies could benefit in the short term.”

However, he added that the extent of those gains will likely remain limited unless the blockade of the Strait of Hormuz continues for an extended period.