NSC warns Middle East crisis could drive up living costs

Thailand’s National Security Council (NSC) and security agencies have classified the escalating conflict in the Middle East as a “state of crisis”, warning that the fallout could directly affect Thailand through higher energy, food and financial costs, with the burden ultimately falling on households through a rising cost of living.

Amid growing concern that the war could widen and last longer than many had expected, security officials no longer see the conflict as a short-term disruption, but as a crisis with the potential to send direct shockwaves to Thailand.

Conflict seen as a prolonged crisis

Security assessments indicate that the conflict involving Iran, Israel and the United States is unfolding in phases and has now entered what officials describe as Phase 3, or the attrition stage. This phase is marked by sustained attacks on weapons stockpiles, logistics systems and strategic infrastructure, following earlier stages involving cyber warfare, decapitation strikes, and attempts to secure air and maritime superiority.

The assessment suggests the war is unlikely to end quickly and may instead evolve into a prolonged conflict, or continue until the opposing sides are forced back to the negotiating table because of mounting costs.

From Iran’s perspective, security agencies believe Tehran is aware of its limitations in technology and air power and is therefore avoiding direct confrontation. Instead, it is seen as pursuing a strategy of prolonging the conflict and increasing the cost to its opponents through diplomacy, regional allies opening multiple fronts, and drone or missile strikes to demonstrate retaliatory capability.

The Strait of Hormuz is also being closely watched as a critical factor, given its role as one of the world’s key oil shipping routes and its significance for global energy prices and economic confidence.

The NSC believes the current crisis could last at least four weeks and does not rule out the possibility of it dragging on for years in a pattern similar to the Russia-Ukraine war. Possible outcomes remain wide open, ranging from the United States and Israel achieving only part of their goals, to a “frozen conflict” in which neither side secures a decisive victory, or a return to political negotiations under pressure from the rising cost of war and energy disruption.

A security source acknowledged, however, that the situation remains difficult to assess because much of the available information is still coming primarily from the United States, making close monitoring and cautious forecasting essential.

Government weighs stricter energy-saving measures

For Thailand, the government is focusing on the likely domestic impact in three key areas: energy, food and finance. Initial responses have centred on seeking public cooperation to reduce oil and energy use, including working from home, holding meetings online, setting air-conditioner temperatures at 26-27 degrees Celsius, and encouraging short-sleeved office wear instead of suits and ties.

At the same time, the Ministry of Energy plans to gradually raise diesel prices on March 16-17, with increases capped at no more than one baht per litre at a time, in order to monitor the situation and reduce pressure on the Oil Fuel Fund.

If conditions worsen, the government is prepared to move beyond voluntary cooperation and introduce mandatory controls. These could include limits on daily fuel purchases, ordering petrol stations to close after 10pm, and requiring illuminated advertising signs, shop signs and cinemas to switch off lights after the same hour.

Concerns grow over supply risks and public readiness

Alongside energy measures, security agencies are also increasing surveillance over possible lone-wolf threats and reviewing protection for symbolic locations, embassies, and expatriate communities linked to the parties involved in the conflict.

The security source stressed that authorities should continue communicating clearly about the country’s oil reserves, warning that the headline figure of 90 days of reserves should not create complacency. Even if national stock levels appear sufficient on paper, fuel distribution in some areas could still face disruption during a crisis.

The source said the real challenge is no longer simply whether the country has enough reserves, but whether the state can manage the crisis effectively and ensure that the public receives timely information to respond appropriately.