Fears of force majeure spread across industries as Iran war continues

A growing number of Korean companies have declared or warned of force majeure, as the ongoing war between the United States, Israel and Iran has disrupted cargo shipments through the Strait of Hormuz. While petrochemical firms are struggling with a naphtha shortage, shipping and aviation companies have suspended operations on Middle Eastern routes. Force majeure is a term used in contracts to free parties from liability or obligation when an extraordinary event or circumstance beyond their control prevents them from fulfilling contractual duties. On March 4, Yeochun NCC became Korea’s first petrochemical firm to declare force majeure since the war broke out. The nation’s third-largest ethylene producer informed its customers of delays in product supply, saying the blockade of the Strait of Hormuz had postponed deliveries of naphtha expected to arrive this month. “The company is facing a critical disruption in the procurement of raw materials due to the sudden and drastic escalation of geopolitical tensions in the Middle East,” the joint venture between Hanwha Solutions and DL Chem