The situation of fighting in the Middle East between Israel and Iran, long-standing enemies. Launch a response “Fire missiles at each other. directly for the first time,” becoming a new wave of shock to the world economy Resulting in the gold market And world oil prices have skyrocketed recently even though this conflict has been resolved. “But the conflict between them still remains.” There is a chance of re-igniting and escalating violence in the Middle East region at any time. Which will lead to a big war or not? Associate Professor Dr. Anusorn Thamjai, Director of the Research Center digital economy International investment and trade University of the Thai Chamber of Commerce Analyze that the cause of the conflict was caused by “Hamas attacks and takes Israelis and other nations hostage,” resulting in Israel’s retaliatory attack in Gaza being too harsh. This has caused some Arab countries to become dissatisfied, especially Iran, which is the main player in the conflict and is already fighting a proxy war with Israel. Fortunately, Israel and Iran do not want the war to escalate just by retaliating until the situation cools down. “But the conflict is not over yet and the proxy war will continue” because Israel And Iran is sandwiched between Iraq, Jordan, and Syria. “For a full-scale war,” troops must move through these participating countries. When that happens, a war in the Middle East region is expected. “It is unlikely to escalate or expand,” but it may be prolonged, affecting “transportation costs and rising energy costs,” and will affect the rate of expansion of the world economy. and the Thai economy causing the value of international trade and investment to decrease If Western countries impose additional economic sanctions on Iran and retaliate by Iran and its allies, it will have an impact on aggregate demand. Including changes in the global supply chain for many products that are consumables. In addition, all multinational companies that have transactions with Iran may be affected, especially Asian companies that have a small number of transactions. “Risk violating the United States by imposing sanctions on Iran.” Most recently, a Thai company was fined 20 million US dollars, or approximately 736 million baht, for violating US sanctions on Iran by the Wall Street Journal newspaper. L reported that “a Thai company agreed to pay a fine” to end litigation over allegations that “The company violated Iran sanctions” by using the US financial system. Making hundreds of millions of dollars from Iranian-made products, it is estimated that the United States and allied nations will have additional economic sanctions. Both speed up monitoring of companies, investors, and financial institutions that violate sanctions. Therefore, it will inevitably affect international trade and investment transactions. Next is the most important risk point. “World trade economy” which is located in two strategic areas in the Middle East, namely the first point… “The Strait of Hormuz” is a strategic point for transporting world oil from countries in the Persian Gulf. This strait is a “dead spot”. that either side may use as a bargaining weapon in terms of military and economic strategy because the Strait of Hormuz is V-shaped, about 150 km long and only about 40 km wide at its narrowest point, connecting the gulf. Persia and the Indian Ocean With Iran in the north and the UAE and Oman in the south, next is the second point…the “Suez Canal”. This point is connected to the Red Sea and out of the Bab El-Mandeb Strait in Yemen. “The maritime routes of the world trade system” which are territorial waters It is one of the busiest places in the world, affecting the transportation of oil, grain, and various goods from Europe to Asia. and Asia to Europe because “world trade” must rely on transportation routes through the Red Sea for 10%, and the Red Sea is an area with the Suez Canal at the northern end of the waters. And there is a gap. At its southern tip, El-Mandeb connects to the Gulf of Aden. This area has oil transportation. and the most dense energy in the world All European goods are transported through these waters. 80% Recently, the United States increased sanctions on oil exports from Iran, the third largest producer in the OPEC group, but crude oil on the world market has not yet surpassed 90 dollars per barrel. Because Iran has no plan to retaliate against Israel after the attack on Isfahan except that “Use two strategic points in the Middle East” to gain bargaining power in a war by blocking travel routes to the Suez Canal, the Red Sea, through the Bab el-Mandeb Strait or the Persian Gulf. and through the Strait of Hormuz It will have a severe impact on the world economy and trade. And the price of oil may rise to an all-time high. However, if “Whichever side chooses to use this method” may lose international support. And those who decide to use such methods are likely to be in a state of stalemate. In a war like this, it is essential that the “Thai government” sends a signal to use energy. and oil efficiently The best way to save is “Allowing domestic energy prices” to reflect reality by gradually reducing price intervention. Price subsidies help alleviate some immediate suffering during periods of high energy prices, but they create long-term problems. “Energy security” uses energy inefficiently. Increase the risk of global warming problems “There is a huge fiscal burden.” Therefore, the Energy Fund is very negative due to price subsidies. “The position of the Fuel Fund” is likely to be negative, exceeding 100 billion baht in this month. April 2024 because the position of the Fuel Fund at the end of March was already negative at 99.8 billion baht. If we continue to subsidize or compensate, it will cause more and more losses. When the price of energy in the world market reverses and decreases, “Thai people” will still have to use expensive oil as before. Because contributions must be collected into the fund. To solve the problem of the loss of the Energy Fund, the “FDA” recently considered increasing the oil fund rate for diesel fuel by an additional 0.20 baht/liter. This will cause the retail price to increase by 50 satang/liter and should increase the liquidity of the Oil Fund. Fuel has a better direction, reinforcing the preliminary point that “The war in the Middle East between Israel and Iran” still has relatively little direct impact on Thailand’s international trade economy. The proportion of Iranian trade value to Thailand’s total trade value is 0.03%, a very low proportion due to Western sanctions. The share of Israeli trade value is 0.2% estimates the impact on luxury goods exports will be severe. It greatly affects the Thai labor market by exporting to Israel. As for the value of exports of food, medicine, weapons and equipment, it increased. “Although in the short term there will be little impact on the real economy,” the impact on the global financial market is widespread. “Stock markets around the world have fallen.” As for the Thai stock market, its market value lost 800 billion baht, foreign investors sold over 10 billion baht in just 3 days, while the stock market index dropped to its lowest level in 3.5 years. Companies listed on the Thai Stock Exchange have relatively little exposure in the two warring countries. Israeli investors and Iran has a holding value of only 141 million baht in Thai stocks. Large funds shift money out of the stock market. and reduce the proportion of investment Both have added weight to the commodity market. It is expected that the trend of commodity prices will continue to rise. Gold prices are still in an uptrend cycle with investors reducing their investment weight in risky assets such as stocks and bonds in emerging markets, while “oil” is in an upward trend. Next, due to the supply factor from the war, the “baht” tends to depreciate. “Investors” turn to holding the US dollar as well as “gold” causing the US dollar to become weaker. There is a tendency to strengthen against major currencies. This is the situation in the Middle East affecting Thailand, especially energy. The “government” should send a signal to save and use efficiently. Because the chance of Thai people going back to using cheap oil is difficult. Click to read more on the “Scoop Page 1” column.
