Stock markets in South Korea and beyond have been rattled by a dramatic escalation of tensions between the United States and Iran, sending ripples through energy, defense, and refining sectors. As diplomatic efforts to revive the Iran nuclear deal falter, the threat of military confrontation has grown increasingly real, prompting investors to react swiftly and decisively.
On February 20, 2026, S-Oil, one of South Korea’s leading refiners, saw its stock price soar by 8.21% to close at 120,000 KRW, according to Seoul Economic Daily. This surge marked a continuation of a remarkable rally: since the end of last year—when the U.S. launched a surprise attack on Venezuela just before ousting President Nicolas Maduro—S-Oil’s share price has jumped by an astonishing 44.58%. The bullish mood wasn’t limited to S-Oil. SK Innovation’s shares climbed 7.59% that same day, while Heungkuk Oil’s stock skyrocketed by 24.36% in a single session. Other sector players, including SK Discovery (up 5.41%), Jungang Energies (17.31%), and Geukdong Chemical (3.45%), also finished the day on a high note.
The positive momentum spilled over into related exchange-traded funds. The KODEX Energy Chemical ETF rose by 1.72% on February 20, closing at 16,575 KRW, after posting a 5.16% gain the previous day—its strongest performance of the year so far. The TIGER200 Energy Chemical ETF also posted robust increases, rising 4.84% on February 19 and a further 2.92% on February 20. These ETFs, which bundle shares of major energy and chemical companies like LG Chem, HD Hyundai, SK Innovation, Hanwha Solutions, and S-Oil, have become a barometer of investor sentiment toward the sector amid growing uncertainty.
What’s fueling this surge? Market analysts point squarely to the geopolitical standoff between Washington and Tehran. With nuclear negotiations deadlocked, the U.S. has ramped up military deployments near Iran, signaling that it is prepared to turn up the heat if diplomacy fails. On February 19, U.S. President Donald Trump issued a stark warning: unless a nuclear agreement is reached within 10 to 15 days, "bad things" could happen. The Wall Street Journal reported, citing multiple sources, that initial airstrikes targeting Iranian military and government facilities could take place within days.
Against this backdrop, global oil prices have been on a tear. On February 20, the New York Mercantile Exchange closed West Texas Intermediate (WTI) crude oil futures for March delivery at $66.39 per barrel—up 5.57% from one week earlier and up 15.82% since the start of the year. Rising oil prices typically spell good news for refiners, since they tend to boost refining margins—the difference between the price of refined petroleum products and the raw cost of crude oil, minus transportation and operational expenses. As a securities industry official told Seoul Economic Daily on February 22, "The growing geopolitical issues between the U.S. and Iran are affecting stock prices in defense, refining, and energy sectors. We are considering incorporating geopolitical uncertainty into our market response strategies."
But while investors in energy and defense stocks have found reason for optimism, the human cost of the U.S.-Iran standoff is playing out in the streets and campuses of Iran. According to Wall Street Journal and Bloomberg, the past week has witnessed large-scale student protests at universities across the country, as Iranians mourn those killed in a brutal government crackdown on dissent. On February 21, students at Tehran’s Amir Kabir University of Technology donned black outfits and chanted "Long live the Shah"—a reference to Reza Pahlavi, the exiled son of Iran’s last monarch and a symbolic leader of the protest movement. At Sharif University of Technology, demonstrators shouted slogans condemning the Islamic Republic and Supreme Leader Ali Khamenei, leading to clashes with Basij militia members outside the campus.
Medical students in Tehran staged marches and sit-ins in support of imprisoned classmates and other young detainees. The traditional 40-day mourning ceremonies for the dead, once solemn religious observances, have now become potent symbols of resistance. In cities like Tehran, Gorgan, and Bandar Abbas, teachers and students have joined forces, refusing to attend classes in ‘empty desk’ strikes to honor the victims and voice their opposition to the government.
The scale of the unrest is staggering. The U.S.-based group Human Rights Activists in Iran estimates that, since late December 2025, roughly 7,000 people have died and more than 50,000 have been arrested in protests sparked by economic hardship. Iranian authorities dispute these figures, claiming the death toll is closer to 3,000. Nevertheless, the protests represent the most significant wave of public dissent against the Islamic Republic in recent memory, according to Wall Street Journal.
The domestic turmoil in Iran is closely intertwined with the international crisis. President Trump’s ultimatum—demanding a nuclear deal within 10 to 15 days and warning of possible military action—has set the stage for a tense period ahead. The International Atomic Energy Agency (IAEA) is set to hold a crucial Board of Governors meeting in Vienna from March 2 to March 6, 2026. Diplomats expect the board to consider a new resolution condemning Iran’s nuclear program, which could lead to further sanctions being recommended to the United Nations Security Council. As Bloomberg notes, previous IAEA decisions have served as legal justification for military interventions—most notably in June 2025, when Israel launched airstrikes on Iran just 24 hours after the IAEA passed a resolution condemning Tehran’s lack of cooperation with inspectors.
For now, global markets are bracing for whatever comes next. Investors are weighing the potential for further oil price spikes and the ripple effects on energy, refining, and defense stocks. Meanwhile, Iranian society is being tested by both internal repression and external threats, its youth and educators at the forefront of a struggle for accountability and change.
As the clock ticks toward the IAEA’s Vienna meeting and President Trump’s ultimatum deadline, the world watches closely. The stakes—for global security, for oil markets, and for the people of Iran—have seldom been higher.