Bangkok: The ongoing conflict between Israel and Iran, with potential implications for the closure of the Strait of Hormuz, poses a significant threat to the Thai economy and trade. The Office of the Higher Education Commission (OHEC) has been closely analyzing these developments, indicating the likelihood of intensified hostilities in the region.
According to Thai News Agency, since June 13, 2015, Israel has launched Operation "Rising Lion" aimed at diminishing Iran's nuclear capabilities, resulting in continuous attacks on Iranian targets. Iran has retaliated by deploying missiles and drones into Israeli territory. The situation escalated further after the United States conducted airstrikes on key Iranian nuclear sites on June 21, 2015, prompting Iran to threaten retaliatory measures and maintain its nuclear development program. A significant concern is the Iranian parliament's vote to potentially close the Strait of Hormuz, a decision awaiting approval from higher authorities in Iran.
The Strait of Hormuz is a critical global oil shipping route, situated between Oman and Iran, connecting the Persian Gulf to the Arabian Sea. As per the U.S. Energy Information Administration (EIA), in 2024, the strait facilitated the transport of approximately 20 million barrels of oil daily, contributing to about 25% of global seaborne oil trade and 20% of worldwide liquid petroleum consumption. This strategic waterway serves as a vital link for Middle Eastern oil and natural gas exports to global markets, particularly Asia.
A potential blockade of the Strait of Hormuz could lead to significant disruptions in oil shipments, forcing tankers to opt for alternative, longer routes, thereby escalating global energy prices and inflation. This uncertainty has already influenced global energy markets, with crude oil prices experiencing volatility. Following the US attack on Iran, Brent crude prices surged to a five-month high, and Goldman Sachs forecasts further fluctuations depending on developments in the strait's security.
The conflict has also impacted international shipping costs, with increased insurance premiums leading to higher global freight rates. Should the situation deteriorate, widespread supply chain disruptions could ensue. Marsh McLennan, the world's largest insurance company, recently increased its tariffs for ships passing through the Persian Gulf, reflecting the heightened risks.
Thailand's economy, heavily reliant on energy imports, is particularly vulnerable. The country imports significant amounts of crude oil and natural gas from the Middle East, primarily transported through the Strait of Hormuz. In 2024, Thailand's energy imports from the Middle East accounted for over 52.6% of its total energy imports, with major suppliers including the United Arab Emirates, Saudi Arabia, and Qatar. A closure of the strait would severely impact Thailand's crude oil supply, potentially leading to increased energy prices and inflation.
Thai exports to the Middle East, mostly routed through the Strait of Hormuz to the Jebel Ali port in the United Arab Emirates, could also be affected. Nevertheless, certain Thai export products, especially those related to oil, might benefit from rising oil prices.
The Director of the Office of the Public Sector Development Commission emphasized that the likelihood of Iran obstructing the Strait of Hormuz is higher than during previous conflicts, given the direct confrontation between Israel and Iran and the involvement of the United States. This situation necessitates continuous monitoring and assessment of potential impacts on the Thai economy. The Ministry of Commerce, along with relevant agencies, is committed to closely analyzing the situation to mitigate any adverse effects.