TAIPEI (TVBS News) — Taiwan's energy supply chain faces potential disruption as Economic Minister J.W. Kuo (郭智輝) revealed on Monday (June 23) that while less than 20% of the island's crude oil and natural gas imports transit through the strategically vital Strait of Hormuz, any blockade would significantly extend delivery times and drive up energy prices. The minister's sobering assessment comes amid escalating tensions following U.S. airstrikes targeting Iranian nuclear facilities and the subsequent approval by Iran's parliament of measures to close the strait, a narrow waterway through which approximately one-fifth of the world's oil supply passes daily.
Early signs of market disruption have already emerged with two massive supertankers reversing course in the Strait of Hormuz, a tangible indicator of how the regional conflict is affecting global shipping patterns and portending likely increases in international crude oil prices. During his briefing to lawmakers, Minister Kuo shared economic modeling data suggesting that a 10% surge in oil prices could potentially elevate Taiwan's Consumer Price Index (CPI) by approximately 0.3 percentage points, affecting everything from transportation costs to manufacturing expenses. The Ministry of Economic Affairs (MOEA, 經濟部), Taiwan's government agency overseeing industrial and energy policy, has been conducting extensive scenario analyses to prepare contingency plans for various levels of market disruption.
In response to concerns raised during a legislative session, Kuo assured Kuomintang (KMT, 國民黨), Taiwan's main opposition party, Legislator Yang Chiung-ying (楊瓊瓔) that the ministry has developed robust contingency strategies to mitigate potential disruptions to Taiwan's energy supply chain should the situation deteriorate further. The economic reverberations were highlighted by Taiwan People's Party (TPP, 民眾黨), a centrist political party founded in 2019, Legislator Chang Chi-kai (張啓楷), who pointed out that the Taiwan Stock Exchange had already suffered a precipitous decline exceeding 400 points during early trading hours, directly attributable to escalating Middle Eastern tensions and energy security concerns.
Minister Kuo emphasized that the Executive Yuan (行政院), Taiwan's cabinet and highest administrative organ of government, has established a dedicated monitoring system tracking the evolving crisis, with officials closely analyzing international oil price trends and spot market quotations to inform their policy responses and market interventions if necessary. The economic chief acknowledged the inherently volatile nature of the current geopolitical situation, noting that rapid developments in the Persian Gulf region could have cascading effects throughout Taiwan's export-oriented economy, potentially affecting everything from manufacturing costs to consumer prices and transportation expenses. ◼
