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.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing service provider, yesterday said it would boost equipment capital expenditure by up to 16 percent for this year to cope with strong customer demand for artificial intelligence (AI) applications. Aside from AI, a growing demand for semiconductors used in the automotive and industrial sectors is to drive ASE’s capacity next year, the Kaohsiung-based company said. “We do see the disparity between AI and other general sectors, and that pretty much aligns the scenario in the first half of this year,” ASE chief operating officer Tien Wu (吳田玉) told an
RSS