The Ministry of Industry (MOI) revealed that due to the Middle East conflict causing increases in oil prices and logistics costs, it is focusing on four key areas: improving production processes, reducing production costs, supporting financial resources, and providing incentives. This is alongside medium- and long-term plans to restructure the industrial sector to enhance energy efficiency, reduce reliance on imported raw materials, and strengthen the resilience of Thailand's manufacturing amid global economic fluctuations.
Mr. Thanakorn Wangboonkongchana, Minister of Industry, stated that the ministry is closely monitoring the conflict between Iran and Israel–the U.S. After the closure of the Strait of Hormuz on 28 February 2026, a crucial maritime oil shipping route accounting for about 20% of daily global oil consumption, crude oil prices worldwide are expected to rise and could reach 150 USD per barrel if the war continues. Currently, crude oil prices stand at 79 USD per barrel (data as of 6 March 2026), leading to higher costs for industries using fuel in production processes, as well as increased maritime transportation costs from insurance and freight charges rising by approximately 50–140%.
The Ministry of Industry analyzed the industrial structure to identify sectors vulnerable to rising energy costs. Industries with high energy consumption—such as cement and concrete production, glass manufacturing, tile and ceramic production, gas and petroleum production, textiles and apparel, and pulp and paper manufacturing—are expected to be more affected by increased energy prices. The petrochemical industry also faces raw material cost challenges. Other industries like electronic components, jewelry, hard disk drives, electrical appliances, and automotive may initially be less impacted and can manage these risks, but close monitoring across all sectors is necessary if the conflict persists.
Meanwhile, some industries are assessed to benefit positively in this situation, including the food and beverage industry, essential during wartime and leveraging Thailand's strong raw material and production capabilities; electric vehicle (EV) and hybrid car industries, supported by volatile and rising global oil prices; the defense industry, with potential export growth; the natural rubber and rubber products industry, due to increased demand for natural rubber as a substitute for synthetic rubber; and the paper packaging industry, benefiting from higher petrochemical costs and the trend toward paper packaging replacing plastic.
From feedback gathered from businesses to the government, two key points emerged: (1) risk and raw material management, including securing alternative raw materials and production inputs, especially energy from the Middle East, diversifying export markets, and managing transportation and logistics to mitigate abnormal situation impacts; and (2) business adaptation and development, focusing on reducing production costs, enhancing operational efficiency, innovating products to add value, adopting digital technology in production and marketing, and promoting the use of domestic raw materials and products.
The Ministry of Industry has prepared urgent measures to assist businesses alongside mid- and long-term industrial restructuring plans. The urgent measures cover four areas: (1) production processes, promoting investment to modernize production technology to be environmentally friendly and energy-efficient, including securing raw material reserves and adjusting production plans based on raw material availability; (2) cost reduction, supporting access to clean energy in factories through rooftop solar, biomass energy production, and promoting sustainable aviation fuel (SAF) from molasses and palm oil to increase farmers' incomes; (3) financial resources, supporting loans under the SME Development Fund according to the Pracharath model, SME Green Productivity loans via SME D Bank, and low-interest (soft) loans; and (4) incentives, providing tax benefits to businesses that follow sustainable development and energy reduction guidelines.
For medium- and long-term support, the Ministry of Industry is developing an industrial restructuring plan to enhance production and energy efficiency in collaboration with industry foundations and relevant public and private agencies. The plan identifies challenges, goals, and directions for restructuring target product groups to reduce dependence on imported energy raw materials, promote the use of local content and Made in Thailand products, aiming to achieve concrete practical outcomes in industrial restructuring.
"The Ministry of Industry is not only monitoring the short-term situation but has also prepared systematic support measures for both urgent and ongoing phases. In the urgent phase, assistance will focus on four areas: improving production processes, reducing production costs, supporting financial resources, and related incentives. Simultaneously, we will continue restructuring the industrial sector to improve energy efficiency, reduce reliance on imported raw materials and energy, and enhance the resilience of Thai manufacturing, enabling businesses to adapt and maintain competitiveness amid global economic volatility," said Mr. Thanakorn.
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