The escalating war involving Iran is sending shockwaves through the global economy, with analysts warning that the resulting surge in energy prices and trade disruptions could shave as much as one percentage point from Thailand’s economic output if the conflict persists.

The crisis has shaken global markets primarily through its impact on energy supply.

Military escalation in the Middle East has disrupted flows through the Strait of Hormuz, a narrow maritime corridor responsible for transporting roughly one fifth of the world’s oil and large volumes of liquefied natural gas.

The instability has pushed global oil prices sharply higher and heightened fears of supply shortages across energy-importing economies.

Economists say such shocks are particularly challenging for Asian countries that rely heavily on imported fuel.

Thailand is considered one of the region’s most exposed economies because of its dependence on energy imports and the central role of manufacturing, transport and tourism in its economic structure.

Rising oil and gas prices increase production costs, weaken consumer purchasing power and raise inflationary pressure across the economy.

Thai policymakers have already begun closely monitoring the situation as global markets react to the crisis.

Officials warn that volatility in financial markets and energy prices could weigh on economic momentum.

In one recent assessment, the Bank of Thailand indicated the conflict could reduce the country’s gross domestic product by at least a fraction of a percentage point, with larger losses possible if the energy shock persists or intensifies.

Private-sector economists and industry groups have issued even more cautious forecasts.

Some analysts suggest that a prolonged conflict could significantly weaken Thailand’s economic outlook by raising freight costs, pushing up electricity prices and increasing war-risk insurance premiums on shipping.

These pressures would directly affect exporters, logistics providers and manufacturers that rely on international supply chains.

Tourism, a major pillar of Thailand’s economy, could also face indirect pressure if higher energy prices raise airline operating costs and reduce global travel demand.

At the same time, geopolitical uncertainty tends to weaken investor confidence, potentially delaying business investment and financial flows into emerging markets.

Beyond Thailand, the conflict has raised concerns about a broader global economic slowdown.

Surging energy prices are already fuelling fears of stagflation, a combination of higher inflation and weaker growth reminiscent of previous oil shocks.

Financial markets across Asia and other regions have reacted with volatility as investors weigh the risks of prolonged geopolitical instability.

For Thailand, the crisis underscores the vulnerability of energy-importing economies to geopolitical tensions in key supply corridors.

While the country maintains strategic oil reserves and diversified trade links, analysts say sustained disruptions to global energy markets could still place significant pressure on growth and inflation in the months ahead.