U.S. President Donald Trump’s announcement that Washington and Tehran have reached a peace agreement transformed the mood in Seoul almost overnight.

South Korea’s stock market surged nearly 5% Monday morning, the won strengthened sharply against the dollar and oil prices retreated on expectations that the Strait of Hormuz will soon reopen. After nearly four months of war, disruption and uncertainty, investors are betting that one of the most serious external risks facing the ROK economy is finally receding.

While the economic relief was quick to materialize, the strategic consequences are more difficult to assess.

For much of the war, South