TAIPEI (Taiwan News) — Minister of Economic Affairs Kuo Jyh-huei (郭智輝) said Monday that although less than one-fifth of Taiwan’s oil passes through the Strait of Hormuz, a disruption there would still lead to higher fuel prices.
Following reports that Iran’s parliament has approved measures to close the strait, two supertankers were seen turning back, indicating that regional shipping is already being affected. International crude oil prices are expected to rise as a result, per CNA.
During a Legislative Yuan session, Kuomintang Legislator Yang Chiung-ying (楊瓊瓔) asked whether a potential closure of the strait would impact Taiwan’s crude oil supply and whether the ministry had contingency plans.
Kuo responded that the ministry began monitoring the situation last week. Officials are evaluating different scenarios based on international oil price trends and are working to secure spot market oil quotations.
He said less than 20% of Taiwan’s crude oil and natural gas imports pass through the Strait of Hormuz. Nevertheless, if the strait were blocked, delivery times would increase and global price spikes would directly affect domestic fuel costs.
When asked whether oil prices would rise in such a scenario, Kuo replied, “Of course they would rise.” He added that the ministry has a pricing model and will assess the situation carefully.
KMT Legislator Cheng Cheng-chien (鄭正鈐) asked about the impact of rising oil prices on the Consumer Price Index (CPI). Kuo said that a 10% increase in oil prices would push the CPI up by 0.3%.
Taiwan People’s Party Legislator Chang Chi-kai (張啓楷) noted that the Taiwan stock market had dropped over 400 points in early trading on Monday due to Middle East tensions. He asked how the Ministry of Economic Affairs plans to address the broader economic effects.
Kuo said the ministry is conducting scenario analyses for oil price ranges from US$80 to US$130 (NT$2,300 to NT$3,800) per barrel. He added that CPC Corporation is drafting response measures and that the Cabinet is closely monitoring the situation.
