Taiwan’s economy minister warned Monday that Taiwan fuel prices could increase if the Strait of Hormuz is closed. Although the island imports less than 20% of its oil through the strait, any disruption there will likely raise global oil prices. Tensions have grown after Iran’s parliament approved a plan to block the key shipping route. Following the announcement, two supertankers turned away from the area. This movement signals early impacts on regional shipping. As a result, global oil prices have begun rising.
During a legislative session, lawmakers questioned the government’s response to the potential crisis. One legislator asked if the disruption would affect Taiwan’s oil supply and whether emergency plans were in place. The minister responded that officials began tracking the situation last week. They are currently analyzing several scenarios based on shifts in international oil prices. They are also securing spot market oil purchases to reduce supply risks.
He confirmed that under 20% of Taiwan’s crude oil and natural gas comes through the Strait of Hormuz. Still, a shutdown would delay shipments and increase international oil prices. This would, in turn, push Taiwan fuel prices higher. When asked directly if prices would rise, the minister answered without hesitation. “Of course they would rise,” he said. He mentioned that the ministry uses a pricing model to evaluate changing conditions.
Lawmakers also raised concerns about inflation. One legislator asked how a 10% rise in oil prices might affect the Consumer Price Index. The minister explained that such an increase would likely boost the CPI by 0.3%. Another legislator pointed out a major drop in Taiwan’s stock market on Monday. He linked the fall to escalating Middle East tensions. He then asked how the ministry plans to handle broader economic consequences.
The minister replied that officials are preparing for oil price fluctuations between US$80 and US$130 per barrel. In response, the state oil company is also drafting emergency measures. At the same time, the central government continues to monitor the situation closely. In conclusion, Taiwan remains on alert as Taiwan fuel prices face upward pressure. The government has promised proactive steps to minimize domestic impact and protect the economy.
