The recent escalation of conflict in the Middle East has pushed global oil prices higher and raised the cost pressure on companies’ raw materials and logistics. According to a Bank of Korea survey, rising raw material prices ranked as the top factor behind a deterioration in overall business sentiment even as manufacturing sentiment showed relative resilience. The combined increase in commodity and logistics costs is reported to be particularly damaging to non-manufacturing firms.

The Bank of Korea survey highlights a key tension: while the manufacturing sector’s sentiment has been maintained to some extent, the broader business outlook has worsened, with raw material costs identified as the primary adverse factor. Available reporting indicates that higher input prices are squeezing margins and complicating procurement strategies for many companies, making cost management and price pass-through more challenging in the current environment.

The expansion of regional conflict — described in the source notes as an escalation following U.S.-Israel strikes against Iran — is the immediate backdrop for the spike in global crude prices. That geopolitical development has translated into higher energy and commodity prices, which feed directly into production costs for goods across sectors. The survey’s timing and repetition in coverage suggest these price effects have become a recurrent concern for policymakers and businesses alike.

Beyond raw materials, the survey points to a parallel rise in logistics costs, which amplifies the shock for sectors that are service- or transport-intensive. Non-manufacturing firms, which often have thinner margins and higher exposure to transport and distribution expenses, are reported to be suffering more acutely. This combination of higher input prices and elevated shipping or delivery costs creates a twofold burden on these businesses.

For corporate planning and market observers, the Bank of Korea findings serve as a reminder that geopolitical shocks can propagate quickly through commodity markets and the real economy. Firms confronted with these cost pressures may need to reassess procurement, inventory, and pricing strategies, while watchers of economic sentiment should treat the survey’s repeated coverage as evidence that these effects are persistent rather than transitory.

The Bank of Korea survey, published in the provided source material, underscores the immediate economic consequences of the Middle East crisis on Korean businesses. As of the March 27, 2026 publication, rising raw material costs and associated logistics pressures remain central to the reported weakening in overall business sentiment, even where manufacturing has not yet shown a parallel decline.