Bangkok: The Exporters Council analyzes export risks if a Middle East war breaks out, warning exporters and governments to find a solution if the Strait of Hormuz is closed, affecting the Middle East market, causing energy prices and agricultural product costs to rise. Mr. Kongrit Chantrik, Director of the Thai National Shippers' Council (TNSC) or the Exporters' Council, said that the Council is keeping an eye on the unrest in the Middle East, even though Iran and Israel have reached a ceasefire agreement, but the situation must be continuously monitored, especially the impact on the transportation of goods. The Strait of Hormuz is a very important strategic point for the world economy because it is the main artery of the world's energy routes, accounting for about 20% of the world's oil exports. Although Thailand does not import crude oil from Iran, it relies mainly on importing crude oil from the Middle East and transporting it through the Strait of Hormuz. In 2024, Thailand imported energy (crude oil, natu ral gas, and refined oil) worth 45,902.8 million US dollars, of which 24,139.3 million US dollars was imported from countries in the Middle East, accounting for more than 52% of Thailand's total imports of such goods. Crude oil was imported from the United Arab Emirates at 28%, Saudi Arabia at 20%, Qatar at 7%, and Kuwait at 2%.
According to Thai News Agency, Thailand imports fertilizers, an important raw material for the agricultural sector, from the Middle East, accounting for 42.37% of the total import value, divided into Saudi Arabia 27.71%, Qatar 3.67%, Jordan 3.48%, Oman 3.41%, and Bahrain 2.3%. Therefore, the closure of the Strait of Hormuz will result in a risk to energy security, higher energy costs and prices, as well as higher prices for Thai agricultural products, affecting both the cost of living of domestic consumers and purchase orders from trading partners in the world market.
In addition, the Middle East region is an important market for Thailand, with a share of Thai exports in 2024 equal to 3.5% of the total export value. Examples of products that have begun to slow down purchase orders to wait and see the situation more clearly include rice, chicken, rubber, food, and electrical appliances, while automotive products will be affected by the closure of the Strait of Hormuz to a limited extent because they can be transported through the port of Jeddah and other ports on the Red Sea.
In terms of international maritime shipping, the TOT initially assessed that if the Strait of Hormuz is actually closed, major ports in the Persian Gulf, such as Jabel Ali, Doha, and Dammam, are likely to be closed, and the service network by feeder ships may change completely, which will affect exports to all countries in the Persian Gulf.
According to data from analysts Linerlytica, the closure of the Strait of Hormuz will affect around 3.4% of global container volumes, or 21 million TEUs out of the 33.2 million TEUs circulating in the Middle East as a whole. Iranian ports also rely on the route to handle 2.5 million TEUs of container cargo, including goods that are redirected to other countries via UAE ports.
However, to minimize the risk, the Thai National Shippers' Council has suggested the following adjustment guidelines for manufacturers/exporters to the current situation:
1) Accelerate the prevention of energy security risks by considering alternative procurement sources/increase crude oil stocks, especially purchasing more energy from the United States as a replacement, which will benefit Thailand in two ways: support the use of renewable energy, increase the proportion of fertilizer imports from other sources such as Russia, China, Malaysia, Laos, Brunei, etc.
2) Manage the risk of maritime transportation by exporters must plan with the end buyer for alternative transportation methods, such as changing to transport through other secondary ports such as Jeddah Port (Saudi Arabia), Salalah Port (Oman), etc. and transport by land to the destination area by doing Inland Transport by checking whether the importer can proceed with customs procedures to bring the goods from that other port or what the shipping line/service provider has to do to plan ahead in case the situation becomes more negative.
In addition, it is necessary to consider how to return the goods, what to do, how to proceed with import customs procedures, how much is the cost, etc., follow the Customer Advisories information on the shipping line's website or ask the shipping line used for clarification. Due to the shipping routes, durations and costs that may change rapidly.