Iran war jolts six Thai industries as OIE warns of Bt12bn GDP hit

The escalating tensions surrounding the Iran war in the Middle East have become a major source of pressure on the global economy, with significant repercussions for Thailand’s industrial sector amid rising risks from energy prices and logistics costs.

Supakit Boonsiri, director-general of the Office of Industrial Economics (OIE), said the key issue requiring close monitoring is the risk of a closure of the Strait of Hormuz, one of the world’s most important oil shipping routes, accounting for around 20% of global daily oil consumption. 

If the route were to be shut, it would have an immediate direct impact on crude oil prices, freight rates and cargo insurance costs.

Oil surge drives up industrial costs

The OIE estimates that if global crude oil prices rise from around US$60-70 per barrel to US$100-105, Thailand’s industrial GDP could contract by around Bt10-12 billion, or about 0.15% of industrial GDP.

At the same time, if the situation drags on and the Strait of Hormuz is closed, oil prices could surge to as high as US$150 per barrel, up from about US$79 as of March 6, 2026. This would sharply increase production and transport costs, particularly freight charges and insurance premiums, which could rise by 50-140%.

In 2025, trade between Thailand and the Middle East was valued at about US$41 billion, accounting for nearly 6% of Thailand’s total trade. Thailand imported as much as US$28.5 billion, mostly oil, reflecting the country’s high dependence on energy supplies from the region.

Energy-intensive industries face the heaviest blow

The industries expected to be hit most directly are energy-intensive sectors, including:

• Cement and concrete (25.92%)
• Glass and flat glass (22.26%)
• Ceramics and tiles (19.82%)
• Gas and petroleum (9.58%)
• Textiles and garments (9.54%)
• Pulp and paper (9.54%)

The petrochemical industry would also be directly affected through higher feedstock costs, particularly for naphtha, ethylene and propylene.

By contrast, Thailand’s major high-value industries such as electronics, gems and jewellery, hard disk drives, electrical appliances and automotive manufacturing have lower energy intensity, so their overall impact is expected to be more limited.

However, despite the pressure, some sectors may benefit from the situation, including:

• Food and beverages, driven by stronger demand for essential goods
• Electric vehicles and hybrids, as the energy transition accelerates
• Natural rubber, which gains an advantage from higher synthetic rubber prices
• Paper packaging, as a substitute for plastic
• Defence industries, due to rising security spending worldwide

Call to diversify risk and reduce reliance on imported oil

The OIE has urged businesses to accelerate risk management efforts, particularly by securing backup sources of raw materials, diversifying export markets and adjusting logistics strategies to reduce the impact of volatile freight costs.

Meanwhile, the Industry Ministry is preparing both short-term and long-term measures, including:

• Containing energy costs by managing diesel, LPG and electricity prices, reducing production costs, and promoting solar rooftops and biomass energy.
   
• Improving efficiency through digital technology and IoT, while enhancing liquidity through low-interest loans and SME funds.
   
• Restructuring industry to reduce dependence on imports and increase local content.

At the same time, alternative fuels such as biofuels and Sustainable Aviation Fuel (SAF) are also being promoted to strengthen long-term energy security.

Supakit said the OIE would continue to monitor the situation closely and assess the impact in depth across all dimensions in order to introduce proactive measures to cope with global economic volatility and help Thailand’s industrial sector weather the crisis with stability amid uncertainty that is likely to persist.