Thailand’s renewed political stability under Anutin coincides with Hormuz-driven energy disruptions, exposing import dependence and testing the balance between crisis management and long-term resilience
Anutin Charnvirakul’s return as Thailand’s prime minister marks an important political moment in a country long defined by instability and revolving leadership. Securing a decisive parliamentary vote on 19 March, Anutin won 293 votes from newly seated lawmakers, gaining a fresh mandate that could usher in an unusually sustained period of political continuity—rare in Thailand’s modern history. Leading the Bhumjaithai Party, he outpaced his chief rival, Natthaphong Ruengpanyawut of the People’s Party, who secured 119 votes, despite an earlier strong electoral showing that had suggested the possibility of an upset. The third-placed Pheu Thai Party has since joined him in a coalition alongside 14 smaller parties, consolidating his position as prime minister.
The convergence of domestic political continuity under Anutin and the external shock posed by the Iran war and instability in the Strait of Hormuz presents a critical moment for Thailand’s policy direction, particularly in the domain of energy security and economic stability.
Once a relatively marginal player, the Bhumjaithai Party has risen to dominance by capitalising on a surge of nationalist sentiment, particularly in the aftermath of military tensions with Cambodia. By advocating the construction of a wall along the Cambodian border, the closure of all border crossings, and the recruitment of 100,000 volunteer soldiers, the party secured a resounding victory. This ability to convert geopolitical anxieties into electoral momentum has not only reshaped the domestic political landscape but also positioned Anutin at the helm during a period when external crises—from regional security tensions to global energy disruptions—are increasingly intersecting with Thailand’s internal policy priorities.
The convergence of domestic political continuity under Anutin and the external shock posed by the Iran war and instability in the Strait of Hormuz presents a critical moment for Thailand’s policy direction, particularly in the domain of energy security and economic stability. As one of the world’s most vital energy corridors, the Strait facilitates the transit of roughly one-fifth of global oil and a substantial share of liquefied natural gas (LNG), much of it bound for Asian markets. Any disruption—whether through military escalation, shipping insecurity, or strategic coercion—has immediate consequences for price stability and supply chains. Around 40 percent of Thailand’s energy imports—oil and liquefied natural gas—are transported through the Strait of Hormuz, making it a critical maritime bottleneck for the country’s energy security. Anutin’s return to office, therefore, comes at a time when energy security has moved to the forefront of national policy, requiring both immediate crisis management and longer-term strategic recalibration.
Thailand’s response so far has built upon existing institutional frameworks while accelerating contingency planning. The Energy Regulatory Commission (ERC), in coordination with key agencies such as the Electricity Generating Authority of Thailand (EGAT) and PTT Public Company Limited, has operationalised measures to mitigate supply disruptions. These include increasing pipeline gas procurement from domestic and regional sources such as the Gulf of Thailand, the Malaysia–Thailand Joint Development Area (JDA), and Myanmar, while maximising ‘swing gas’ contractual flexibility. Parallel efforts are underway to secure additional LNG through both long-term agreements and spot cargoes, with coordination with suppliers to prepare for potential disruptions from key Gulf exporters, such as Qatar and the United Arab Emirates. At the operational level, authorities are assessing fuel reserves, particularly oil stocks at power plants, and ensuring logistical readiness for fuel-switching from gas to oil if required. In addition, the government has directed the reactivation of previously decommissioned units at the Mae Moh coal-fired power plant to help stabilise electricity costs amid rising fuel prices. However, this will likely increase carbon emissions and local air pollution, posing environmental and public health concerns even as it provides short-term energy security.
At the same time, the Thai government has introduced targeted measures to stabilise domestic fuel prices while reducing reliance on imported energy. Auttapol Rerkpiboon, Thailand’s energy minister, has outlined the use of the Oil Fuel Fund, in coordination with fuel traders, to cushion diesel prices while allowing limited adjustments in line with global market conditions. Efforts are also underway to promote biofuels, with price incentives encouraging motorists to shift from E10 to E20 gasoline, thereby increasing the share of domestically produced energy in the fuel mix. In parallel, diesel standards have been adjusted from B5 to B7 to expand biodiesel use. These supply-side measures are complemented by broader energy conservation efforts, including maintaining air-conditioning at 26–27°C, reducing electricity consumption in offices, adjusting office dress codes, promoting remote work and virtual meetings, and improving vehicle efficiency—reflecting a combined approach to managing both demand and supply amid ongoing energy market volatility.
Despite these interventions, the economic effects of the Strait of Hormuz disruptions are already becoming visible. The government’s decision to cap diesel prices has helped cushion the immediate impact on transport operators, manufacturers, and households, but this has come at a growing fiscal cost, with the Oil Fuel Fund slipping into deficit and further borrowing being considered to sustain subsidies.
The Hormuz crisis also reinforces deeper structural concerns within Thailand’s energy and economic framework. Volatility in global oil and LNG markets underscores the risks of continued dependence on Middle Eastern energy and highlights the country’s exposure to external shocks beyond its control.
Meanwhile, higher energy and logistics costs are spreading across the economy, affecting petrochemicals, manufacturing, exports, and agriculture. Disruptions to shipping routes and surging insurance premiums have increased delivery times and freight costs, undermining the competitiveness of Thai exports—particularly to European markets—with goods worth an estimated 32 billion baht (approximately US$ 990 million) currently stranded in transit.
Input shortages—from petrochemical feedstocks to fertilisers—are pushing up production costs, while consumer prices are rising, dampening purchasing power and economic activity. Although the government has tightened price controls on essential goods, drawn on reserves, and promoted alternative fuels—including adjustments to biofuel blends such as B20 to ease cost pressures—these measures can only mitigate, rather than eliminate, inflationary pressures moving through the system. As a result, Thailand faces the risk of a prolonged high-cost, weak-demand environment if global energy disruptions persist.
Importantly, the Hormuz crisis also reinforces deeper structural concerns within Thailand’s energy and economic framework. Volatility in global oil and LNG markets underscores the risks of continued dependence on Middle Eastern energy and highlights the country’s exposure to external shocks beyond its control. While efforts to diversify suppliers and expand reliance on international, regional, and domestic gas production are underway, including exploring US LNG, Russian oil, and maximising Gulf of Thailand output to mitigate risks from a Strait of Hormuz closure, Thailand’s position as a mid-sized importer limits its bargaining power in times of global scarcity. This not only constrains its ability to secure stable supplies but also exposes it to sustained price volatility, making energy security as much a question of market position as of policy design.
The Strait of Hormuz crisis will test the state’s ability to balance short-term stability with long-term structural transformation in an uncertain global energy landscape.
Anutin’s term thus holds both opportunities and challenges. While the Iran war situation may or may not continue and does not affect Bangkok for now, the economic fallout from it needs to be assessed and addressed. In the regional context, while a halt in the border dispute with Cambodia has been sought, the area remains contentious as each side harbours resentment against the other. In recent months, Thailand has accused Cambodia of continuing attacks, while Cambodia has alleged Thai encroachment. Whether Anutin’s nationalist positioning stabilises or further complicates regional dynamics remains uncertain. Overall, the Strait of Hormuz crisis will test the state’s ability to balance short-term stability with long-term structural transformation in an uncertain global energy landscape.
Sreeparna Banerjee is an Associate Fellow with the Strategic Studies Programme at Observer Research Foundation
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Sreeparna Banerjee is an Associate Fellow in the Strategic Studies Programme. Her work focuses on the geopolitical and strategic affairs concerning two Southeast Asian countries, namely ...
Read More +
PREV
