- 10
- March
In EP.1 we discussed soaring costs and pricing decisions. In EP.2 we covered supply chain disruptions, and EP.3 addressed cash flow protection — all of which were about "reacting" to what has already happened. But this EP is about "looking ahead" — building long-term strategy, not just firefighting. The 2026 Iran war oil crisis is not the first, and it will not be the last. Executives who prepare in advance always come out ahead.
In summary: No one knows how long the oil crisis will last, but executives who prepare 3-scenario plans (Best / Base / Worst) will make faster and more accurate decisions. This article teaches Scenario Planning, Pivot Strategy, stakeholder communication, and lessons from 7 oil crises over the past 50 years.
Series: Managing Business Through the Oil Crisis — EP.1 Soaring Costs: How Much Should You Raise Prices? | EP.2 Supply Chain Disruptions | EP.3 Protect Your Cash Flow | EP.4 Strategic Crisis Planning
Scenario Planning — Prepare 3 Scenarios, Never Bet on Just One
Scenario Planning is a tool that world-class executives have used since the Royal Dutch Shell era in the 1970s — the principle is simple: never bet the future on a single scenario, but prepare plans for 3 scenarios so you can make quick decisions regardless of how events unfold.
| Scenario | Scenarios | Oil Price (Brent) | Business Impact | Action Plan |
|---|---|---|---|---|
| Best Case | War ends in 2-4 weeks, Strait of Hormuz reopens quickly | Drops to $85-90 | Costs return to normal in 1-2 months, temporary impact | Do not rush to raise prices permanently; use temporary surcharges instead |
| Base Case | Prolonged 2-3 months, Hormuz partially open | $100-120 | Costs increase 15-25%, margins clearly shrinking | Adjust selling prices + negotiate with suppliers + cut unnecessary costs |
| Worst Case | Escalates into regional war (entire Middle East) | Exceeds $140-160 | Costs increase 30-50%, some businesses may need to temporarily halt production | Pivot the business + find new revenue + negotiate with banks + temporarily downsize |
Do not bet on just one scenario: Many executives plan only for the Base Case, then panic if the Worst Case materializes — conversely, planning only for the Worst Case may lead to excessive cost-cutting that causes missed opportunities when conditions improve. You must prepare plans for every scenario and set Trigger Points for when to switch plans.
Lessons from Past Oil Crises — History Always Repeats
Oil crises are nothing new — they happen repeatedly with a similar pattern each time: geopolitical event → prices surge → economy slows → prices return. Knowledge from history helps us prepare better.
| Year | Event | Peak Oil Price (Inflation-adjusted) | Crisis Duration | Key Lesson |
|---|---|---|---|---|
| 1973 | OPEC Embargo (Yom Kippur War) | ~$56 (+300%) | 5 month | Depending on a single energy source is an enormous risk |
| 1979 | Iranian Revolution | ~$107 (+150%) | 12 month | A prolonged crisis destroys more businesses than a severe but short one |
| 1990 | Persian Gulf War (Iraq invades Kuwait) | ~$65 (+90%) | 7 month | SPR (Strategic Petroleum Reserve) helps mitigate but does not fully solve the problem |
| 2008 | Speculation + surging demand from China/India | $147/บาร์เรล | 6 month (then dropped to $32) | Peak oil prices ≠ permanent prices; prepare for both rises and falls |
| 2020 | COVID-19 (demand collapse) | -$37 (Prices went negative!) | 3 month (negative prices) | Disruption comes in all forms, not just price increases |
| 2022 | Russia-Ukraine | $139/บาร์เรล | 4 month (peak) then gradually declined | Companies that diversified their supply chains survived better |
| 2026 | Iran War (Strait of Hormuz closure) | $114+ (ongoing) | ? (not yet concluded) | Strait of Hormuz = the world's most vulnerable chokepoint (20% of global oil) |
Lessons from the 2022 Crisis — What Did Surviving Companies Do?
- Diversified suppliers — Did not rely on a single source, reducing geopolitical risk
- Strategic stockpiling — Increased Safety Stock for key raw materials by 2-3 months
- Forward price contracts — Locked energy/shipping costs 3-6 months ahead
- Adjusted Product Mix — Focused on high-margin products, reduced low-margin items hit hardest by costs
- Communicated directly with customers — Explained reasons for price increases, building understanding
What every crisis has in common: Every crisis ends — but businesses that adapt quickly gain an advantage when it does, because slower competitors may have already disappeared from the market. The faster you have data, the faster you can adapt, which is the same principle behind enterprise risk management.
Pivot Strategy — 4 Axes You Must Adjust to Keep Up
"Pivot" does not mean changing your business entirely — it means adjusting direction at critical points to weather the crisis with minimal damage, and potentially emerge stronger than before.
Axis 1: Adjust Product Mix — Focus on High Margin, Reduce Low Margin
Not all products are equally affected. Products with high energy/logistics cost ratios + low margins will be hit hardest. During a crisis, focus on selling products where margins remain healthy, and reduce production of items where margins have evaporated.
Axis 2: Adjust Sales Channels — Online Reduces Storefront Costs
Rent, store electricity, outbound shipping — everything is rising. This is a great opportunity to accelerate digital channels to reduce fixed costs.
Axis 3: Adjust Pricing Model — From Fixed Price to Index-based
Instead of setting fixed prices and absorbing rising costs, switch to Surcharge / Fuel Adjustment Fee or Index-based Pricing that adjusts with oil prices.
Axis 4: Adjust Supplier Network — Near-shoring, Local Sourcing
International shipping costs are surging → an opportunity to turn to domestic or regional suppliers, reducing distances and risk.
| Pivot Strategy | Advantages | Disadvantages | Suitable for Which Business Types |
|---|---|---|---|
| Adjusted Product Mix | Preserves margins immediately | Total sales may decrease, some customer segments lost | Manufacturers with multiple product lines |
| Add Online Channel | Reduces fixed costs, reaches broader customer base | Requires upfront digital investment, takes time to build | Retail, B2C, food & beverage |
| Index-based Pricing | Margins stay constant regardless of oil price increases | Customers may resist; clear communication is essential | Logistics, construction, B2B with long-term contracts |
| Near-shoring / Local Sourcing | Reduces shipping costs, Lead Time, and risk | Domestic raw material prices may be higher; quality must be verified | Manufacturers dependent on imported raw materials |
Communicating with Stakeholders — Transparency Builds Confidence
A crisis does not just affect costs — it affects relationships with all stakeholders. Poor communication can cost you customers, suppliers, and employees at a time when you cannot afford to lose them.
| Stakeholder | What to Communicate | What Not to Do | Channel |
|---|---|---|---|
| Customers | Explain reasons for price adjustments with data (costs up X%), describe how you will support them | Raise prices silently, or make a large one-time increase without advance notice | Notification letter, email, sales visit |
| Supplier | Negotiate together for win-win solutions — extend credit terms in exchange for volume commitments | Unilateral price pressure, or threatening to switch suppliers without a real plan | Direct meetings, video calls |
| Employees | Be direct about the situation — where the company stands, what the plan is, no need to panic | Stay silent until employees panic, allowing rumors to circulate | Town Hall, executive email |
| Shareholders / Banks | Present 3-scenario contingency plans + financial projections with clear action plans | Hide the numbers, or claim "no impact" when there is impact | Special report, board meeting |
Transparency builds confidence: Customers understand if you explain with data — "Shipping costs increased 40% due to the Hormuz crisis, we absorb 60% and pass on 40%" is far better than "We are raising prices 15%" with no explanation. The same applies to suppliers — if you show data proving both sides are affected, negotiations become much easier.
Have Competitors Raised Prices Yet? — 3 Pricing Strategies During a Crisis
One of the most frequent questions from executives is "Have competitors raised prices yet?" — the answer directly impacts our strategy.
| Strategy | Suitable Situation | Advantages | Disadvantages | Risk |
|---|---|---|---|---|
| Raise prices before competitors | Essential products, strong brand, customers have no alternatives | Preserves margins immediately, no prolonged cost absorption | Customers may flee to competitors who have not yet raised prices | Medium |
| Raise prices later (follow competitors) | Highly competitive market, interchangeable products | Retains customers temporarily, customers feel cared for | Margins lost during the waiting period, possibly 1-2 months | Low-Medium |
| No price increase at all (absorb margin loss) | Short-term crisis + sufficient cash reserves + seeking market share | Competitors' customers migrate to us, market share grows | If the crisis drags on, margin erosion becomes severe | High (if crisis is prolonged) |
Recommendation: For most businesses, the strategy of "raising prices later + using temporary surcharges" is a sound middle ground — it retains customers in the short term while providing a trigger for full price adjustments when necessary.
Government Policies — Monitor and Leverage Them
The government offers relief measures during crises — executives must know what is available and act quickly. The Ministry of Industry has announced 4 urgent measures to address the situation.
| Measure | Details | Business Impact | Action Required |
|---|---|---|---|
| Oil Fund | Subsidizes diesel to cap at 33 baht/liter (temporary) | Reduces shipping burden, but the fund is limited and may run out quickly | Calculate both scenarios: with subsidy vs. without subsidy |
| Ft Electricity Tariff Measure | Ft cap at 4.18 baht/unit (May-August cycle) | Factory electricity costs do not spike immediately, but watch the next cycle | Plan energy costs 2 cycles ahead |
| Low-interest SME Loans | SME Bank + commercial banks offering special interest rates | Boosts liquidity during cost surges | Prepare financial documents + business plan and apply immediately |
| SME Support Measures (Ministry of Industry) | Advisory centers + domestic supplier matching | Reduce import costs, find local alternatives | Contact the Provincial Industrial Office |
How Does ERP Help with Strategic Planning?
Strategic decisions during a crisis require accurate, timely, and complete data — not gut feelings. An ERP system serves as the Single Source of Truth for all business data, enabling executives to make faster and more accurate decisions.
| ERP Feature | How It Helps with Strategy | Example During the Oil Crisis |
|---|---|---|
| Financial Dashboard | Real-time financial overview without waiting for month-end | Monitor daily Cash Position, AR/AP, and Margin for immediate decision-making |
| Profitability Analysis | Profit analysis by product, customer, and channel | Instantly know which products still have healthy margins and which are negative → adjust product mix |
| Budget vs Actual | Compare budget against actual costs for every line item | See that actual shipping costs exceed budget by 40% → adjust forecast immediately |
| Multi-scenario Reporting | Generate multi-scenario reports for comparison | Print Best/Base/Worst Case reports for the Board to see the full picture at a glance |
| Procurement Analytics | Analyze procurement costs, compare suppliers | Find the best-priced supplier for the current situation and switch suppliers quickly |
Note: Saeree ERP is currently developing an AI Assistant (in Training phase) — in the future it will automatically analyze trends and recommend strategies. However, the existing Financial Dashboard, Profitability Analysis, and Budget vs Actual features are already sufficient for strategic decision-making.
Summary of the 4-Part Series — Managing Business Through the 2026 Oil Crisis
| EP | Topic | Key Takeaways | Primary Action |
|---|---|---|---|
| EP.1 | Soaring Costs: How Much Should You Raise Prices? | Cost Breakdown, What-if Analysis, cost forecasting | Know actual costs → price based on data |
| EP.2 | Supply Chain สะดุด | Dual Sourcing, Safety Stock, emergency procurement plan | Diversify suppliers → reduce risk |
| EP.3 | Protect Your Cash Flow | Cash Buffer, AR/AP Management, emergency credit lines | Maintain liquidity → never run out of cash |
| EP.4 | Strategic Crisis Planning (this article) | Scenario Planning, Pivot Strategy, stakeholder communication | Look ahead → plan for the long term |
Combined Checklist — 10 Things Executives Must Do Now
| # | Action Required | From EP | Urgency |
|---|---|---|---|
| 1 | Perform Cost Breakdown on top 10 products — identify exactly how oil prices affect each cost component | EP.1 | Do it now |
| 2 | Run What-if Analysis for 3 Scenarios (oil at $90 / $120 / $140) | EP.1 | Do it now |
| 3 | Audit every supplier — who is at risk? Do you have backups? | EP.2 | Do it now |
| 4 | Increase Safety Stock for key raw materials by 2-3 months | EP.2 | This week |
| 5 | Create a 13-week Cash Flow Forecast — know when cash runs out | EP.3 | Do it now |
| 6 | Negotiate emergency credit lines with banks (before you actually need them) | EP.3 | This week |
| 7 | Prepare 3-scenario plans (Best / Base / Worst) with Trigger Points | EP.4 | Do it now |
| 8 | Communicate with customers, suppliers, employees — do not stay silent | EP.4 | This week |
| 9 | Review government measures — SME loans, Oil Fund, Ft electricity tariff | EP.4 | This week |
| 10 | Consider ERP if you do not have one — how to choose ERP and implementation planning | ทุก EP | This month |
The greatest crisis is the one we are unprepared for — but the crisis that makes us strongest is the one we face with clear data and a solid plan.
— Saeree ERP Team
References
- Wikipedia — Economic impact of the 2026 Iran war
- Goldman Sachs — Oil prices could reach $140 in prolonged Iran conflict
- TDRI — Thai economy and risks in 2026
- กระทรวงอุตสาหกรรม — Minister of Industry orders 4 urgent measures
- Thai PBS — Analysis of the Iran war's impact on the Thai economy
