WITH the US-Israel air war against Iran having expanded today (March 2) engulfing Lebanon, Gulf states and a British air base in far-away Cyprus, Thailand’s Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) reassured that there are sufficient oil reserves for 60 days and contingency plans could be utilised to secure supplies from alternative sources, Amarin TV said this evening.
Although Thailand does not directly purchase oil from Iran, the Strait of Hormuz is the primary route for transporting 60-70% of its oil. Even so no short-term issues are anticipated, except possibly oil prices rising but this is currently stable due to lower demand.
While the long-term outlook remains uncertain, if the war is not prolonged, there should be no major problems.
Regarding industries exporting to Iran and the Middle East, such as processed food and tyres, discussions with 10 relevant industry groups showed that export totals are not high so there should not be a short-term impact, JSCCIB reassured.
Thailand’s good positioning and friendly relations with other countries will attract investment in various industries. Prior to this war, several industries had contacted the country about relocating their production bases here. Talks are being held with a visiting delegation on March 6 with Thailand positioning itself as the “Switzerland of Investment” in this region, acting as a central hub to attract investment.
Mr. Poj Aramwattananon, president of the Thai Chamber of Commerce, said this war has severely disrupted business in the Middle East, affecting the entire region and transportation systems.
“Regarding exports to the Middle East, I believe there will be a severe shortage. The question is, where will exports go? Will it be to Saudi Arabia or Africa to reach the Middle East? This might shift tourism demand from Europe and Scandinavia to Asia or Asean,” he said.
Regional conflicts will likely lead to wealthy individuals in the Middle East seeking new, safest locations, especially health centres, potentially leading to longer stays. They will also see significant opportunities in export, manufacturing, tourism and related services, as well as investment to go by exports in January growing by $30 billion, averaging $25 billion annually, Poj said.
However, Thailand’s problem is a severe labour shortage with investors mentioning this, and if this issue is not resolved, the growth engine will stagnate therefore the Labour Ministry is urged to address this problem.
Mr. Danucha Pichayanant, secretary-general of the National Economic and Social Development Council (NESDC), said based on an assessment of two most likely scenarios, the first one whereby the Middle East war ends within a month with transportation of oil via the Strait of Hormuz and the Red Sea impacted short-term, this is lead to oil prices potentially staying in the range of $95-105 per barrel.
The second scenario is a prolonged conflict, potentially closing the Strait of Hormuz. If this happens, the global supply chain could be affected, with oil prices potentially reaching $115-125 per barrel.
As both two scenarios will impact Thai economic growth, it is estimated that GDP in 2026 could fall to a low of 1.3%. However, if the fighting ends within one month, Thailand’s GDP in 2026 will expand by 1.6%, down from the previously estimated 2% growth for this year, Danucha added.
CAPTIONS:
Top and Front Page – Petrol pumps.
First insert – Mr. Poj Aramwattananon, left.
Second insert – Mr. Danucha Pichayanant. All photos – Amarin TV
Also read:
Crude soars, stocks drop after US strikes on Iran
Thailand remaining neutral in Middle East war: PM
Iran hit with more strikes after Khamenei’s death, Trump issues new warning
Passengers urged to check flights amid cancellations and routes changes
No old-timer politicians welcome in Bhumjaithai-led cabinet
No Klatham MPs to vote Anutin for PM unless brought into Bhumjaithai-led coalition
People’s to file duty-negligence, misconduct lawsuit against Election Commission
Bhumjaithai-led coalition finally opts to do without Klatham, Democrats
