The effects of an escalating war between Israel and Hamas will be much more serious and extensive than the ongoing war in Ukraine, due to potential involvement of western and Arab countries and the fact that the Middle East provides 70% of global oil demand, according to Aat Pisanwanich, an independent scholar and economist.
As far as Thailand is concerned, Thai exports to Saudi Arabia, the United Arab Emirates and Israel, estimated at more than US$10 billion annually, are likely to fall by 10-15%, he said, adding that global crude oil prices may rise to US$100 per barrel from the current rate, fluctuating between 82-85 US dollars/barrel, if Iran, Qatar and some western countries, such as the United States, Britain and Canada, get directly involved in the Israeli-Hamas conflict.
Even if Israel manages to occupy Gaza, the war will not be over and may drag on, with the participation of Hezbollah and Islamic Jihad terrorist groups against the Israelis, he said.
Meanwhile, Chaicharn Charoensuk, president of the Thai National Shippers Council, said that insurance companies may impose war risk surcharges on oil tankers using the Suez Canal, which is about 400km from Gaza, for oil transport to Europe.
Oil transport by oil tanker through the Straits of Hormuz, through which about 17.2 million barrels of crude oil pass each day, may also be affected in the short run, he noted.
As far as Thai shippers are concerned, Chaicharn said Thai exporters may be forced to pay extra risk insurance for exports to Europe and the Middle East.
Thanawat Pholvichai, rector of the University of Thai Chamber of Commerce, said that, since Israel is not a major trading partner of Thailand, with bilateral trade estimated at about 40 billion baht per annum, the war between Israel and Hamas will not have much impact.
If the war escalates and spreads across the Middle East, Thai exports to the region may shrink by 1.7%, amounting to about US$4.7 billon.
