Thailand moves to protect oil security

Thailand is gearing up to safeguard energy security as it is among the most exposed Asian economies to supply disruptions caused by rising tensions in the Middle East.

Amid heightened risks to shipping through the Strait of Hormuz, the government has initiated plans to import crude oil from West Africa and the United States, with deliveries anticipated by the end of April, Energy Minister Auttapol Rerkpiboon said.

To mitigate the effects of rising fuel prices, the government plans to utilize the state-managed Oil Fuel Fund, which accumulates contributions from fuel sales during periods of low global prices to buffer retail prices when crude spikes.

With net oil imports equivalent to 4.7 percent of GDP, Thailand has the region's highest exposure to a negative energy trade balance. On Wednesday, Prime Minister Anutin Charnvirakul declared a 15-day freeze on diesel prices at 29.94 baht ($0.94) per liter, as long lines formed at petrol stations in key cities such as Bangkok, Phuket and Chiang Mai.

"I hope the conflict concludes swiftly as the government prepares contingency plans," said Bangkok resident Ukrit Pongchaman, 36. "Nonetheless, a surge in fuel prices seems imminent. Stocking up on (fuel) now could lead to savings."

Experts say targeted subsidies — particularly for diesel, which is crucial for food logistics and public transport, and liquefied petroleum gas used by households and small enterprises — are more sustainable than widespread price controls.

"However, prolonged intervention carries fiscal risks," said Attakrit Patchimnan, a professor at the Faculty of Political Science at Thammasat University in Bangkok.

"If global oil prices remain elevated for an extended period, the Oil Fuel Fund could face deficits, increasing pressure on government borrowing," he said. "Therefore, subsidies should be temporary and carefully targeted to avoid long-term fiscal strain."

Attakrit warned that if the conflict stretches beyond a month, the consequences could deepen. Prolonged high oil prices would raise production and transport costs, reduce household purchasing power, and strain exporters through higher freight and insurance costs.

"Sustained tensions could slow regional growth and heighten inflation risks, despite cooperation within the Association of Southeast Asian Nations," he said.

Wichai Kinchong Choi, a business development expert at Thailand's Kasikornbank, said the renewed tensions underscore the need for the government to build new economic cooperation networks while implementing flexible financial and fiscal strategies.

"Thailand needs to develop prudent risk management strategies focusing on domestic energy distribution, develop renewable energy, and reduce dependency on external economies by enhancing economic diversity," he said.

The volatility in the Middle East is likely to push Thailand to further adjust and strengthen its economic and trade investment cooperation strategies with China, he added.