Thailand says Iran will allow its ships to pass safely through the Strait of Hormuz

Thailand says it has received a commitment from Iran to allow its ships to transit the Strait of Hormuz. At a time when this Southeast Asian country is grappling with a fuel shortage, the move is an important diplomatic achievement.

Thailand’s Prime Minister Anutin Charnvirakul said in a televised address on Saturday: “A key outcome is that the Ministry of Foreign Affairs has held discussions with Iran to allow crude oil tankers bound for Thailand to pass through the strait safely, which will help ease the market’s concerns about crude oil supply.”

In response, Iran’s embassy in Thailand has not yet commented.

The Strait of Hormuz is a vital route for transporting crude oil and natural gas. Since the outbreak of relevant conflict involving Iran, the shipping lane has basically been shut down, triggering a surge in oil prices and panic over supply shortages.

At the time Anutin made the above remarks about the situation in Iran, the Thai government was stepping up efforts to crack down on alleged hoarding and fuel profiteering, with market worries about energy supplies growing day by day.

Anutin said relevant authorities are closely monitoring the situation, are preparing legal action against those found to be manipulating the market, and are urging the public to report improper business practices.

Anutin tried to reassure people who drive, saying that fuel supply remains sufficient and that the procurement and distribution system is operating normally; meanwhile, officials are strengthening oversight to prevent price distortions in the domestic energy market.

He said, “As the general public is being troubled by the current energy crisis, we will take decisive legal measures against those who are hoarding fuel for excessive profit.”

Driven by Middle East conflict lifting international oil prices, multiple provinces in Thailand have seen fuel shortages. The gap between the domestic subsidized fuel prices and international market prices has been widening steadily. As the government failed to resolve the fuel shortage, public dissatisfaction has intensified, and authorities have increased oversight of fuel pricing and supply.

Although the government has repeatedly assured that reserves can last for about 100 days, fears over tightening supply have triggered panic buying, with diesel being especially severe. Although relevant authorities have taken measures to increase retail supply, many gas stations have imposed purchase limits, and farmers, industrial users, and commuters have lined up with oil cans in hand to buy fuel.

To ease subsidy pressure, the government has raised the retail price of fuel. Compiled data show that, for diesel—one of the main fuels for transportation, industry, and agriculture—the price this week rose to 38.94 baht per liter, the highest since 2008.

Anutin said that oil procurement and refining capacity are still sufficient to meet domestic demand; however, affected by panic buying and smuggling into neighboring countries, diesel consumption per day has jumped from around 67 million liters per day before the conflict broke out to about 84 million liters per day.

He said that because the retail price is still about 16 baht per liter lower than the market price, hoarding—especially of diesel—has increased somewhat.

Thailand’s Finance Minister Ekniti Nitithanprapas said the retail price may be raised further to curb continually swelling subsidy spending and maintain fiscal stability.

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