Thailand Rushes to Secure Oil, Fertilizer as Hormuz Remains Shut
(Bloomberg) -- Thailand is racing to secure new shipments of oil and fertilizer as an intensifying standoff over the Strait of Hormuz drains its reserves.
The country’s Foreign Minister Sihasak Phuangketkeow traveled to Oman this week to negotiate emergency fuel supplies and press for the safe passage of Thai vessels through the strategic waterway. Iranian projectiles last month struck the Thai-flagged Mayuree Naree and killed three crew members.
Agriculture Minister Suriya Jungrungreangkit, meanwhile, asked Russia to supply 1 to 2 million tons of urea fertilizer annually at “friendly rates.” Companies such as PhosAgro PJSC and Ural Chem Co. have expressed interest in long-term contracts.
Despite talk of a US-Iran ceasefire extension, policymakers are still on high alert in Southeast Asia, which depends heavily on the Middle East for energy and key agricultural inputs. Thailand has about three months of oil supply and roughly one month of fertilizer reserves if shipments continue to be disrupted.
Fuel, particularly diesel, and fertilizers are critical to Thailand’s economy, supporting factories, farms and millions of rural households reliant on rice and other crops. More than half of Thailand’s oil and urea fertilizer imports come from the Middle East, much of it shipped through Hormuz.
Rising fertilizer costs are already threatening the main planting season between May and July, when demand peaks. Higher input costs could cut output by 21%, resulting in a 19% decline in farmers’ income, according to a note from Kasikorn Research Center. In the week ended April 8, Thai white rice 5% broken — an Asian benchmark — jumped 10%, the biggest gain since August 2023.
On Wednesday in Washington, Finance Minister Ekniti Nitithanprapas floated raising public debt ceiling to create fiscal space to manage the fallout from the Middle East conflict.
The Thai government on Saturday approved a 3.7 billion baht ($116 million) relief package to ease the immediate economic impact from the conflict. It also endorsed a broader soft-loan package to support longer-term adjustment, including 5 billion baht for clean energy measures, 30 billion baht for farmers, and 100 billion baht for small and medium-sized enterprises.
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