Since 28 February 2026, the effective closure of the Strait of Hormuz following the United States and Israeli military strikes on Iran has triggered the largest disruption to global energy supply in the history of the oil market. For Thailand, a country described by analysts at Nomura as among the most exposed economies in Asia to rising oil prices, the crisis is not merely a macroeconomic concern. It is already reshaping the legal and commercial environment in which businesses operate.
Thailand’s industrial backbone, including the automotive, electronics, chemicals, and food processing sectors, relies heavily on energy and raw materials sourced from the Gulf. Simultaneously, the tourism sector depends on the connectivity of major hubs like Dubai, Doha, and Abu Dhabi. The reality of this risk was driven home on 11 March 2026, when the Thai-flagged vessel Mayuree Naree, operated by Precious Shipping Plc, was struck by projectiles while attempting to transit the Strait.
This article examines the legal and compliance dimensions of the crisis for businesses operating in Thailand, with particular focus on force majeure and contract performance, shipping and logistics obligations, energy and petrochemical exposure, and the regulatory response now emerging from Thai authorities.
How does force majeure work in Thailand?
Where a contract is silent on force majeure, parties may be able to rely on legal rights and remedies available under the governing law of the contract. Under Thai law, force majeure is governed by the Civil and Commercial Code (CCC). A party seeking to invoke force majeure must generally establish that the event was:
- unforeseeable or unavoidable;
- beyond the party’s reasonable control; and
- the cause of the failure to perform.
Contractual language matters are essential, and force majeure clauses in commercial contracts often enumerate specific triggering events such as war, armed conflict, government action, or acts of state. Where a contract expressly references war, hostilities, or blockades as force majeure events, a party’s position will generally be stronger.
Where the clause is broadly drafted or absent, parties will need to rely on the underlying CCC framework, which is interpreted more narrowly by Thai courts.
The geographic scope of the clause also warrants careful review. Contracts covering goods or services originating from the Gulf or transiting through the Strait of Hormuz are clearly within the ambit of the crisis. However, secondary effects, such as elevated fuel costs, logistics delays caused by rerouting, or raw material shortages affecting manufacturing in Thailand, may be harder to characterise as directly caused by the force majeure event itself, particularly in the absence of explicit contractual language.
Most force majeure clauses also require the invoking party to notify its counterparty within a defined period of becoming aware of the triggering event, which in this case is a geopolitical conflict. Businesses that have not yet issued formal notices should do so promptly, as failure to comply with notice requirements may waive the right to rely on the clause entirely.
Finally, a party invoking force majeure is generally expected to take reasonable steps to mitigate the impact of the event, including exploring alternative supply routes or sources. Failure to demonstrate any mitigation efforts may weaken a force majeure claim, even where the underlying event is otherwise qualifying.
Shipping, insurance, and logistics exposure
The practical fallout from the closure of the Strait of Hormuz has been immediately felt by businesses in Thailand. Within hours of the blockade at the end of February 2026, global shipping giants like Maersk suspended all transits through the Strait and the Red Sea, a route already battered by regional instability since late 2023.
For exporters and importers, this not only caused shipping delay, but also posed as a structural crisis. Whether goods are destined for the Gulf, South Asia, or Europe, the results are identical:
- Drastically longer transit times as vessels reroute.
- Surging freight rates and war-risk insurance premiums.
- Paralyzing uncertainty for cargo currently at sea or sitting in port.
For businesses that procure their own cargo insurance, a “standard” policy may no longer be enough as most marine cargo policies contain standard exclusions for war and strikes. Coverage for losses or delays stemming specifically from the conflict depends entirely on whether a business has opted for, and successfully maintained, War Risk extensions.
With over 150 tankers currently anchored outside the Strait, those without adequate coverage face “live” risks that are effectively uninsured. It is therefore recommended for business operators to audit their policy terms and Incoterms immediately to see who bears the risk of loss while goods are in limbo.
The Legal Defence: Navigating the CCC
When delivery deadlines are missed, the legal dispute often centres on demurrage charges, which are accrued when a vessel is held in port beyond the agreed time.
For contracts governed by the Civil and Commercial Code (CCC), Thai courts do have the discretion to excuse a delay if performance has become impossible or substantially more burdensome due to circumstances outside the party’s control. However, the legal bar is high:
- The Burden of Proof: The “defaulting” party carries the heavy burden of proving the event was unavoidable.
- The Mitigation Test: The court will scrutinize whether the party took reasonable steps to plan for disruption. Simply pointing to the blockade may not be enough, and parties may need to demonstrate that no alternative logistics were viable.
- Active Documentation: Parties should be documenting every cause of delay and communicating with counterparties in writing. A paper trail of good faith attempts to mitigate loss is often the difference between a successful defence and a costly judgment.
What should businesses in Thailand do now?
Given the pace at which the situation continues to develop, businesses operating in Thailand should prioritise the following actions:
Contract and Documentation Review
Businesses should immediately audit their commercial contracts, particularly supply agreements, logistics contracts, energy supply arrangements, and export sales contracts, for force majeure clauses, material adverse change provisions, pricing adjustment mechanisms, and notice requirements. Where a force majeure notice is required to be issued, it should be sent out immediately.
Insurance Assessment
Businesses should review their insurance coverage in light of the current conflict, including marine cargo policies, business interruption cover, and trade credit insurance. Where coverage gaps are identified, businesses should seek advice on available extensions or alternative coverage, noting that underwriting conditions for war risk cover in the current environment are highly dynamic.
Supply Chain Contingency Planning
Businesses dependent on Gulf-originated raw materials or on shipping lanes through the Strait of Hormuz and the Red Sea should assess alternative procurement options, including non-Middle Eastern suppliers, alternative feedstocks, and overland supply routes where commercially viable. Documentation of these mitigation efforts will be important both for force majeure purposes and for any future insurance or litigation proceedings.
Communication with Counterparties
Clear, timely, and well-documented communication with supply chain counterparties, including customers, suppliers, logistics providers, and financiers, is essential. Businesses should avoid making representations about delivery timelines or performance that cannot be supported and should document all communications relating to the crisis.
Outlook on the Strait of Hormuz situation
The Hormuz crisis is unfolding rapidly, and its legal and commercial implications for businesses, even here in Thailand, are likely to deepen if the maritime corridor remains disrupted into the second quarter of 2026. But even if the conflict were to end tomorrow, experts estimate that it will take several years for global supply chains to revert back to pre-conflict conditions.
Businesses should therefore conduct careful legal and commercial risk management. Organisations that act quickly to review their contractual exposure, document performance issues, and engage proactively with counterparties will be better positioned to navigate both the immediate crisis and the regulatory landscape that is likely to follow.
This article is provided for general information purposes only and does not constitute legal advice. While care has been taken to ensure accuracy at the time of writing, the situation described is rapidly evolving and laws and administrative practices may change. Specific legal advice should be sought for individual circumstances.
For advice regarding supply chain contracts, force majeure, or dispute resolution, please contact Silk Legal at [email protected].
