BANGKOK – Thailand’s tourism industry, a major driver of the economy, is under fresh pressure as US and Israel-led military action against Iran rattles energy markets and raises regional risk.
Iran has threatened, and effectively disrupted, shipping through the Strait of Hormuz, sending oil prices sharply higher. As a result, airlines face rising jet fuel bills, flights from the Middle East face more disruption, and Thai authorities are watching the safety of Israeli tourists more closely. In northern areas such as Chiang Rai, worries about fuel prices have also added to broader cost fears.
The conflict intensified after joint US and Israeli strikes on Iranian targets in late February 2026. Since then, tanker traffic through the Strait of Hormuz has nearly stopped.
The waterway is a key route for roughly 20% of the world’s oil supply. That slowdown pushed Brent crude above $100 a barrel, with spikes close to $120 in early March, creating one of the sharpest energy supply shocks in years.
Airline Costs Jump as Jet Fuel Prices Rise
Airlines flying in and out of Thailand are feeling the squeeze as jet fuel prices climb fast. The Civil Aviation Authority of Thailand (CAAT) said jet fuel prices tripled in the first days of the crisis, rising from about $70 to $80 per barrel to far higher levels after Gulf supplies tightened.
- Airlines have started adding fuel surcharges, and ticket prices are rising on long-haul routes, especially those avoiding Middle East airspace.
- Carriers say that if oil stays high, fares may climb again, which can hurt demand.
- Thai Airways and regional airlines face tighter margins, and investor worries have weighed on share prices.
Analysts say each extended jump in oil prices cuts into airline earnings, so some airlines may reduce capacity on Europe and Middle East routes.
Fewer Flights from the Middle East and Europe
At the same time, the conflict has disrupted air links between Thailand, the Middle East, and onward markets. Airspace limits, flight pauses, and longer reroutes have triggered hundreds of cancellations at Thai airports.
Thailand’s Tourism Council expects a noticeable hit if conditions don’t improve:
- March could see at least 300,000 fewer foreign visitors.
- Over eight weeks, losses could reach 600,000 arrivals, translating to more than ฿40 billion in lost revenue.
- The biggest hit falls on high-spending travelers from Europe and the Middle East, since detours raise costs and reduce seat supply.
Short-haul visitors from Asia have held up better. Even so, Thailand’s 2026 tourism recovery plans face setbacks from fewer flights and higher travel costs.
Safety Focus Increases for Israeli Tourists
Thailand has tightened security in places popular with Israeli visitors, as officials watch for any spillover risks tied to the war. Extra patrols have appeared in tourist areas in Bangkok, and in destinations such as Pai in Mae Hong Son province, where around 3,000 to 4,000 Israelis are often based. Authorities have also increased attention around Chabad Houses and large events, including Koh Phangan’s Full Moon Party.
Officials are tracking possible threats to Israeli and Jewish interests overseas, based on alerts shared by international partners. No major incidents have been reported, but the added presence is meant to reassure visitors and protect Thailand’s image as a safe place to travel.
Israeli arrivals have already shifted in recent years for several reasons, and wider instability may slow demand further.
Thailand’s Fuel Prices, Plus Unease in Chiang Rai
Thailand imports most of its oil, so global price spikes hit quickly. In response, the government ordered temporary steps, including a 15-day cap on diesel and gasoline prices through state energy firms such as PTT, to soften the immediate shock.
Still, anxiety has spread in many areas:
- Drivers have lined up at gas stations in Bangkok, Chiang Mai, and border provinces.
- Some stations have reported short-term closures and limits on sales.
- In Chiang Rai, a province that depends on tourism, residents and businesses worry that fuel shortages could disrupt transport, farming, and visitor travel.
Local drivers and hotel operators say high fuel costs can push up food prices, electricity bills, and ground transport fees. Those costs shape the visitor experience, especially in a region tied to cross-border travel and eco-tourism. If fuel swings continue, Chiang Rai could face a double hit from weaker demand and higher operating costs.
Prime Minister Anutin Charnvirakul has asked the public to stay calm and said officials are tracking supply levels. Even so, analysts warn that if Hormuz disruptions drag on, domestic prices could rise once the caps end.
Bigger Economic Risks for Thailand’s Tourism Outlook
Before the crisis, Thailand’s tourism numbers had been improving. A wider mix of visitor markets, including China, South Korea, and Japan, offers some protection. However, long-haul weakness can still slow momentum, because those travelers often spend more per trip.
Economic planners have laid out possible outcomes:
- If fighting eases within a month, oil could settle around $95 to $105 per barrel, and GDP growth could slip to about 1.6%.
- If shipping problems continue, prices may stay around $115 to $125 per barrel, pulling growth closer to 1.3%.
Tourism and transport groups want quick backup plans. These include changes to fuel excise taxes and added support for airlines seeking alternative supply routes.
For now, tourism officials continue working with airlines and security agencies to limit damage. The next few weeks will depend on whether energy shipments recover and whether tensions cool enough to restore travel confidence.
