Oil prices would increase, affecting the consumer price index (CPI), if the Strait of Hormuz is closed, even though less than 20 percent of Taiwan’s oil and gas imports pass through the strait, Minister of Economic Affairs J.W. Kuo (郭智輝) said today.
Iran has threatened to close the strait in retaliation against US airstrikes on Iranian nuclear facilities.
At a meeting of the legislature's Economics Committee, Chinese Nationalist Party (KMT) Legislator Yang Chiung-ying (楊瓊瓔) asked Kuo how a blockaded Strait of Hormuz would affect Taiwan and whether the Ministry of Economic Affairs has countermeasures in place.
Photo: Chang Yi-cheng, Taipei Times
The ministry has been tracking the issue since last week, made several predictive models and obtained price information from the market, Kuo said.
Although less than 20 percent of Taiwan’s imported oil and gas passes through the strait, there could be ramifications for oil prices, he said.
If the strait were to be closed off, ships would be forced to take longer alternative routes, he said.
Asked if this meant crude oil prices would increase, Kuo said: “Of course.”
However, he added that the ministry would carefully evaluate all of its models and potential strategies.
In response to concerns about the effect of rising oil prices on CPI, a measure of inflation, Kuo said that a 10 percent increase in oil prices would lead to a 0.3 percent increase in CPI.
A 1 percent increase in electricity prices would raise CPI by about 0.027 percent, he added.
Taiwan People's Party Legislator Chang Chi-kai (張啓楷) asked about the conflict’s effect on the stock market and how the ministry would respond after the TAIEX fell 400 points in early trading today.
CPC Corp, Taiwan (CPC, 台灣中油) has put together a series of strategic responses based on crude oil prices increasing by as much as US$130 per barrel, while also taking into account the CPI, Kuo said.
Meanwhile, the Executive Yuan said in a statement that Vice Premier Cheng Li-chiun (鄭麗君) has ordered the Cabinet's price stabilization task force to monitor possible fluctuations in oil prices and consumer goods.
SECOND-RATE: Models distilled from US products do not perform the same as the original and undo measures that ensure the systems are neutral, the US’ cable said The US Department of State has ordered a global push to bring attention to what it said are widespread efforts by Chinese companies, including artificial intelligence (AI) start-up DeepSeek (深度求索), to steal intellectual property from US AI labs, according to a diplomatic cable. The cable, dated Friday and sent to diplomatic and consular posts around the world, instructs diplomatic staff to speak to their foreign counterparts about “concerns over adversaries’ extraction and distillation of US AI models.” Distillation is the process of training smaller AI models using output from larger, more expensive ones to lower the costs of training a powerful new
Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) have repeatedly hit new highs, but an equity analyst said the stock’s valuation remains within a reasonable range and any pullback would likely be technical. The contract chipmaker’s historical price-to-earnings (P/E) ratio has ranged between 20 and 30, Cathay Futures Consultant Co (國泰證期) analyst Tsai Ming-han (蔡明翰) told Central News Agency. With market consensus projecting that TSMC would post earnings per share of about NT$100 (US$3.17) this year, supported by strong global demand for artificial intelligence (AI) applications, and the stock currently trading at a P/E ratio of below 25, Tsai said the valuation
The artificial intelligence (AI) boom has triggered a seismic reshuffling of global equity markets, with Taiwan and South Korea muscling past European nations one by one. With its stock market now valued at nearly US$4.3 trillion, Taiwan surpassed the UK, Europe’s biggest market, earlier this month, data compiled by Bloomberg showed. South Korea is about US$140 billion away from doing the same. The tech-heavy Asian markets have shot past Germany and France in the past seven months. The shift is largely down to massive gains in shares of three companies that provide essential hardware for AI: Taiwan Semiconductor Manufacturing Co (TSMC, 台積電),
The US Department of Commerce last week ordered multiple chip equipment companies to halt shipments of certain tools to China’s second-largest chipmaker, Hua Hong Semiconductor Ltd (華虹半導體), its latest action to slow the country’s development of advanced chips, two people familiar with the matter said. The department sent letters to at least a handful of companies informing them of restrictions on tools and other materials destined for two Hua Hong facilities US officials believe make China’s most sophisticated chips, the people said. Top US chip equipment companies Lam Research Corp, Applied Materials Inc and KLA Corp, each of which has significant
RSS