Abstract
Since late February 2026, escalating Middle East conflict has disrupted global oil markets, significantly impacting Thailand, a highly energy-dependent economy that imports 90% of its crude oil. Following a period of low inflation, rising oil prices could lead to increased costs for households and businesses, pushing inflation up amid sluggish growth. The government’s Oil Fuel Fund may buffer impacts temporarily, but rising costs in energy and food are anticipated. Policymakers must prioritize energy security, diversification, and efficient logistics to mitigate vulnerability.
Summary
Impact of the Middle East Conflict on Thailand’s Economy
Since late February 2026, the escalating conflict in the Middle East has shaken global oil markets, affecting crucial shipping routes. For Thailand, which heavily relies on energy imports, this situation comes at a precarious time, especially as the country recently moved out of a prolonged period of deflation.
Thailand’s Energy Vulnerability
Thailand imports around 90% of its crude oil and 35-40% of its LNG, making it highly susceptible to rising global oil prices. Any increase in oil costs quickly translates to higher transportation, manufacturing, and food prices. These changes could reflect prominently in consumer inflation, further squeezing household budgets, particularly for lower-income families.
Future Outlook and Recommendations
As oil prices rise, businesses should brace for increased costs while households prepare for higher living expenses. Policymakers need to manage the Oil Fuel Fund effectively to shield the economy while also striving for long-term energy security through diversification and renewable energy initiatives. Resilience will depend on proactive measures rather than mere forecasts.
Source : Thailand on Inflation Watch from The Middle East Conflict
