Bangkok: National Security Council reveals it is keeping an eye on the expanding Red Sea crisis. Affecting the Thai economy and trade from attacks on merchant ships by the Houthi group. that has been going on for more than 66 days and is still severe Following retaliatory attacks by the US and allied forces, many are concerned that the Red Sea region could become a new battleground in the Middle East. Mr. Poonphong Naiyanaphakorn, Director-General of the Office of Trade Policy and Strategy (OCT), revealed that since the Houthi group in Yemen attacked and seized cargo ships related to Israel sailing through the Bab El Strait. It's deb. (Bab-el-Mandeb) in the Red Sea on 19 Nov. '23 to show opposition to Israel's war in the Gaza Strip. This led the United States and its allies to announce the establishment of Operation Prosperity Guardian to protect shipping in the Red Sea. But the Houthis insist they will continue attacking their targets until Israel's war in Gaza ends. The stressful events occurred in the Red Sea, which is an important shipping route for the world. At this time, it has affected maritime transportation. And if the event continues to drag on It may affect the supply chain of various products, including crude oil, around the world. The Red Sea, which is connected to the Suez Canal, is the main trade route between Asia and Europe. It also covers approximately 12% of the world's maritime trade routes. After the attack on shipping ships, shipping companies around the world suspended operations on the Red Sea route. and change to other routes that take longer to transport. Push for freight rates to increase on many routes. Not only freight rates passing through the Red Sea and Suez Canal. As a result of the above situation, products from Thailand that will go to the Middle East, Europe, North Africa, including some parts of the eastern United States. faced with higher costs The data on freight rates as of the 2nd week of 2024 from the Shipping Council of Thailand found that freight rates in January 2024 increased from December 2023 on both the Thai-Jebel Ali route. (United Arab Emirates) Thai-Europe route (Main Port) Western Thai-US route and eastern Thai-US route, especially the Thai-Europe route Freight rates increased 252% for 20ft containers and 196% for 40ft containers to $3,200-$4,500. Shippers also face additional costs such as stopping fees. disruption of the transportation system Additional service fees during peak periods and contingency fees, etc. However, if considered in terms of the impact on Thai product exports along the routes that are expected to be affected, as follows: Exports to Europe. Exports to Europe from Thailand are routed almost entirely through the Red Sea and Suez Canal. by exporting to the European Union and the United Kingdom Accounting for more than 8% of Thailand's total exports. Important export products that may be affected by transportation problems include computers. Equipment and components Air conditioners and components, electrical circuit boards, automobiles, equipm ent and components Apparel, rubber products, air conditioners, processed chicken and wheat products Exporting to the Middle East The Red Sea Route and Suez Canal are routes for shipping goods from Thailand to countries in the Middle East, including Jordan and Israel, accounting for approximately 10% of Thailand's trade with the Middle East. The main export products include automobiles, equipment and components. Canned and processed seafood For the remaining 90% of countries, it will be transported through the ports of the United Arab Emirates. to further distribute products to other Middle Eastern countries. Therefore, overall exports to the Middle East will likely not be affected much by this event. Exporting to Northern Africa Red Sea-Suez Canal route It is the main export channel to Egypt, which is Thailand's number 1 important trading partner in the Northern Africa region (accounting for 0.2% of Thailand's total merchandise exports), with important export products such as chemicals, canned and processed seafood. automotive parts and steel products Exporting to the United States Disruptions to shipping through the Red Sea also have an indirect impact on Asian and US trade. This is because in the past some shipping ships have changed their route from the Panama Canal to the Suez Canal to avoid the low water level of the Panama Canal, which is a restriction on navigation. And when an unsafe situation arises in the Red Sea, shipping routes may need to be changed again to sailing through the Cape of Good Hope. The conflict in the Middle East started with the Israel-Hamas war in Gaza. until the crisis in the Red Sea It is a sign that the war has a chance of expanding to other areas or there may be an event where other countries directly join the war. Although the current situation, the main war zone has not extended beyond the Gaza Strip. But there are periodic clashes between Israel and various armed groups along the Israeli-Lebanese and Syrian borders. This makes many parties worried that it may spread to the regional level. Until the closure of the Strait of Hormuz, one of the world's most important oil transportation routes. with 21 million barrels of oil transported per day, or 21% of the daily global oil transport volume. It is also an important export shipping channel for countries that export almost all oil and natural gas in the Middle East. The World Bank has estimated that If the war between Israel and Hamas escalates and leads to a large-scale conflict in the Middle East, comparable to the 1973 boycott of Arab oil in the Western world or the Yom Kippur War (Yom Kippur), Kippur) will reduce global oil supply by 6-8 million barrels per day. As a result, world oil prices are in the range of 140-157 US dollars per barrel. record high For the impact on Thailand The closure of the Strait of Hormuz has a direct impact on Thailand, which relies on crude oil imports from the Middle East. In 2023, Thailand will import energy (crude oil, natural gas, and refined oil) from Middle Eastern countries. The proportion is approximately 50% of all Thai imports of such products. By importing from the United Arab Emirates. mainly Saudi Arabia and Qatar, so if the Strait of Hormuz is closed More than half of the country's crude oil supply will face transportation problems. There was a shortage of crude oil. Oil prices soar Affecting industrial production and the transportation sector Which will lead to inflation and cost of living problems. while on the export side The Strait of Hormuz is also an important channel for distributing Thai products to countries in the Middle East. Most Thai goods are transported through the Strait of Hormuz to enter the port in Jebel Ali in the United Arab Emirates. The situation in the Middle East is likely to last longer than many previously predicted. The fighting has the potential to spread beyond the Gaza Strip. amid increasing uncertainty after armed groups in the region became more active Although there has been a temporary truce and hostage exchange between Israel and Hamas in the past, Bu t as long as Israel does not end its operations in Gaza, War is poised to break out in other areas, as the Red Sea crisis has disrupted global shipping. Therefore, all parties must closely monitor the situation and consider its continued impact. Because if the war spreads, it will have an impact on the Thai economy. Both directly and indirectly on a large scale, with the NIOC, including various agencies in the Ministry of Commerce, working closely with the private sector. To determine measures and guidelines for solving problems that may occur under such uncertain circumstances.-514 Source: Thai News Agency