The South Korean currency fell against the US dollar on Thursday as global oil prices climbed amid concerns about supply disruptions stemming from heightened tensions in the Middle East.

The won opened at 1,480.1 per dollar, down 13.6 won from the previous session, reports Yonhap news agency.

The currency had risen over the previous two sessions, rebounding from a 17-year low, after US President Donald Trump hinted that the war in the Middle East could end soon and global oil prices showed signs of stabilising.

But the won weakened again in line with rising global oil prices as Iran effectively halted cargo traffic through the Strait of Hormuz. Iran fired on commercial ships and targeted Dubai International Airport, stepping up efforts to disrupt traffic in the oil-rich Persian Gulf.

The surge in oil prices came despite the International Energy Agency (IEA)'s decision to release its largest-ever oil stockpile of 400 million barrels to mitigate supply disruptions.

The United States also said it plans to release 172 million barrels from its Strategic Petroleum Reserve starting next week.

The foreign exchange and stock markets have shown high volatility since last week as the US-Israeli attacks on Iran have escalated tensions across the broader region.

Higher oil prices put downward pressure on the Korean won as they increase the country's demand for dollars to pay for crude imports. South Korea depends heavily on energy imports.

The benchmark Korea Composite Stock Price Index (KOSPI) opened 0.75 per cent lower at 5,567.65 on Thursday, tracking overnight losses on Wall Street amid concerns about a prolonged war.

Meanwhile, South Korean stocks started slightly lower on Thursday amid escalating oil price fluctuations sparked by the lingering U.S.-Iran conflict and shipping disruptions at the key waterway in the Middle East.

The Korean won sharply lost ground against the greenback.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 39.38 points, or 0.7 per cent, to 5,570.57 as of 9:15 a.m. The index edged up 1.4 per cent on Wednesday.