Hormuz closure would drive up oil and fertiliser import costs, TNSC warns
Iran’s potential closure of the Strait of Hormuz would drive up Thailand’s import costs for crude oil and fertilisers, the Thai National Shippers' Council (TNSC) warned on Monday.
TNSC executive director Kongrit Chantrik said that if Iran were to shut the strategic waterway, key ports such as Jebel Ali, Doha, and Dammam would likely be inaccessible, affecting the entire regional shipping network.
In 2024, exports to the Middle East accounted for 3.5% of Thailand’s total exports, so the closure could hinder overall export growth this year, he said.
However, he stressed that the greater impact would be on imports, as over 9.27% of Thailand’s imports come from the Middle East—particularly crude oil and fertilisers, which would face significant disruption.
In the first five months of 2025, Thailand imported 41.09% of its crude oil from the United Arab Emirates, 12.04% from Saudi Arabia, and 3.35% from Qatar—totalling 56.48% from just these three nations.
Meanwhile, 42.37% of fertiliser imports came from the Middle East, broken down as follows: 27.71% from Saudi Arabia, 3.67% from Qatar, 3.48% from Jordan, 3.41% from Oman, and 2.3% from Bahrain.
This would inevitably impact Thailand’s agricultural sector by increasing production costs, Kongrit said. The added burden would create pricing pressure, as farmers may struggle to raise selling prices enough to cover the increase.
He urged swift action to diversify energy sources, increase crude oil reserves, and prioritise imports from the United States.
However, switching suppliers is not straightforward, as procurement is usually arranged in advance, and each source yields varying volumes of refined products due to differences in crude quality.
Kongrit also called for government support to expand solar rooftop installations in households and industrial sectors, reducing reliance on oil and natural gas and thereby lessening long-term energy risk.
Fertiliser imports should also be diversified, with increased sourcing from Russia, China, Malaysia, Laos, and Brunei.
As for transport alternatives, Kongrit recommended the use of secondary ports such as Jeddah (Saudi Arabia) and Salalah (Oman), followed by overland shipping to final destinations.
He noted that shippers would need to be consulted in advance on operational procedures, including return shipment protocols, customs clearance, and cost structures.
“Even before the Strait of Hormuz closure was officially reported, freight rates from Thailand to Jebel Ali, UAE, had already risen by 20%—from US$1,000 per TEU to US$1,200,” he added.
