Thailand’s Ministry of Commerce has issued directives to state bodies to devise strategies to mitigate potential surges in energy costs in the event of an escalation in the Israel-Iran conflict. The directive follows Iran’s missile and drone assault on Israel, a retaliatory move against Israel’s alleged attack on Iran’s consulate in Damascus earlier this month. This marked the first direct attack by Iran on Israel in a longstanding shadow conflict, typically characterised by Iran launching assaults on Israel via terror proxies.
In response to the escalating situation, Commerce Minister Phumtham Wechayachai announced that he had tasked the ministry, the International Trade Promotion Department, the Trade Policy and Strategy Office, and foreign commerce diplomats with assessing potential impacts on Thai trade. Phumtham also called for diligent monitoring of activities in the Strait of Hormuz, a crucial maritime route for oil and natural gas exports for numerous Middle Eastern nations, including Saudi Arabia, the United Arab Emirates, Iran, Qatar, and Kuwait. The strait sees a daily traffic of around 21 million barrels of oil.
Should the conflict intensify to the point of disrupting this key trade route, the implications could be severe. The disruption could significantly hinder oil procurement, leading to hikes in transport costs and global energy prices. Phumtham stressed the need for state bodies to examine the potential negative outcomes of such scenarios and devise strategies to mitigate impacts on Thailand and its export sector.
The National Economic and Social Development Council previously expressed concerns that the Israel-Hamas conflict could impact the Thai economy via fuel and liquefied petroleum gas (LPG) prices should the situation worsen. The assessment indicated that the country’s capacity to stabilise fuel prices seems to be diminishing, while LPG prices may continue to rise given the rapid depletion of the oil fuel fund, reported Bangkok Post.
Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), advised the government to develop a risk management plan in light of the situation.
Business News
