Thanakorn has instructed the Ministry of Industry to closely monitor the US-Iran war, fearing its impact on Thai industry. He emphasized the need to expedite impact assessments and systematically develop response measures following potential crude oil price increases.
On 2 March 2026, Mr. Thanakorn Wangboonkongchana, Minister of Industry, stated that the Ministry is concerned about the escalating conflict in the Middle East, which could affect the global economy and Thai industry, especially oil prices and logistics costs. He assigned ministry agencies to assess potential impacts and directed the Office of Industrial Economics (OIE) to closely monitor the situation, evaluate effects on Thai industry, and systematically prepare response plans.
Although direct trade between Thailand and Iran is relatively small, totaling 146.18 million USD in 2025 (Thailand exported 136.82 million USD and imported 9.36 million USD), the main risk lies in indirect effects through global energy structures and international transport. Trade between Thailand and 15 Middle Eastern countries amounts to 40.54 billion USD, with imports from the region reaching 28.06 billion USD, resulting in a trade deficit of 15.58 billion USD, mainly due to high-value energy imports. This makes Thai industry sensitive to energy price volatility and logistics costs in the region.
Furthermore, Iran's closure of oil shipping routes through the Strait of Hormuz—which handles over 20% of global oil transportation—significantly increases the risk of global oil supply disruptions. It is forecasted that if the conflict expands and prolongs, crude oil prices could rise from the current approximately 70 USD per barrel to around 100–105 USD per barrel. This would raise energy, transportation, and production costs for Thai industry accordingly.
Regarding production impacts, analysis using the Input-Output Table shows that diesel price increases affect energy and transport costs in many industries, especially those with high diesel use in production processes: steel and iron at 7.93%, textile dyeing at 6.31%, basic chemicals at 4.82%, cement at 4.43%, metal products at 4.01%, glass and glass products at 2.74%, and garments and textiles at 2.53%. These industries are likely to be significantly affected if oil prices continue rising. Additionally, freight rates and insurance costs may increase, impacting logistics costs for Thai businesses, particularly exporters to the Middle East and Europe who rely on maritime transport, potentially facing shipping delays from route changes.
According to macroeconomic modeling by the Office of Industrial Economics (OIE), rising crude oil prices due to the conflict would impact Thai industry in two phases: in the short term, a 10–20% increase in crude oil prices (approximately 77–85 USD per barrel) could reduce industrial GDP by about 2.7–3 billion THB, or roughly 0.06% of industrial GDP. In the medium term, a 50% price rise (approximately 100–105 USD per barrel) could reduce industrial GDP by 10.1–12 billion THB, or about 0.15% of industrial GDP. This reflects how energy price volatility affects Thai manufacturing.
“The Ministry of Industry has assigned the OIE to closely monitor and track the situation, coordinate with industry operators across sectors, and conduct in-depth impact assessments to develop systematic response measures. These include monitoring energy costs, considering relief measures for businesses—especially SMEs—promoting machinery upgrades to reduce energy use, and supporting risk management related to transportation, exchange rates, and export market diversification to maintain Thai industry competitiveness amid global economic uncertainties,” Thanakorn said.