Cambodian–Thai crisis: why the two sides have been unable to reach an agreement

Photo: Getty Images

Bangkok’s decision cannot be explained solely by the failure of previous negotiations to produce results. Following the 2025 border clashes, the memorandum became a liability for the Thai government. Anutin’s Bhumjaithai Party came to power on a pledge to take a tougher stance towards Cambodia and cancel the document. Therefore, returning to negotiations without significant concessions from Phnom Penh would have given the opposition, the military and nationalist groups grounds to accuse the prime minister of breaking his campaign promise. The economic benefits of joint resource development did not outweigh these political risks.

The Cambodian government is in a different position. The country lacks developed offshore extraction infrastructure, while access to the deposits depends on an agreement that would provide companies with clear rules for operating. At the same time, Phnom Penh lacks sufficient leverage to compel its more powerful neighbour to resume bilateral negotiations. In June 2026, Hun Manet’s government initiated the establishment of a commission of independent experts under the UN Convention on the Law of the Sea. Although Thailand is required to present its position to the commission, it may not accept its recommendations.

Bangkok can afford to delay an agreement, as Thailand already has its own production, contracts and the necessary infrastructure. A new agreement on joint development is therefore not critical for Thailand. Cambodia, by contrast, is losing the opportunity to attract investors and begin developing the fields, but cannot determine the terms for operations on the disputed shelf on its own. Although the Association of Southeast Asian Nations (ASEAN) helped the two sides halt the fighting along the border, its mediators cannot compel the Thai government to return to the memorandum. The crisis is therefore also a test of whether the bloc is capable of influencing the decisions of its own members.

The value of the disputed fields for Cambodia and Thailand

The gas reserves in the approximately 26,000-square-kilometre area where the two countries’ claims overlap are estimated at nearly 12 trillion cubic feet of natural gas, in addition to significant oil reserves for which no reliable estimates are yet available. However, the governments have yet to determine who will issue exploration and production licences and how the revenues will be shared.

Thailand is interested in developing new fields because of the power sector’s dependence on natural gas. Production from older fields in the Gulf of Thailand is declining, while LNG imports leave the country exposed to global prices and reliant on seaborne supplies. In January 2026, Thai company Gulf Development signed a 15-year contract with France’s Engie to supply liquefied natural gas to its power plants. The deal ensures stable supplies, but also shows that Thai power producers will remain dependent on imported gas for many years to come.

Bangkok already has experience with resource extraction in an area where the maritime boundary has not been finally delimited. In July 2025, the state-owned company PTTEP acquired a 50% stake in Block A-18 in the Malaysia–Thailand Joint Development Area. Gas from the block is used to generate electricity in southern Thailand. Thus, the Thai government does not oppose joint development of a disputed shelf as such. The Malaysia–Thailand mechanism works through a joint authority, agreed rules for companies and the separation of resource development from the final delimitation of the boundary. However, in relations with Cambodia, such cooperation has been blocked by Thailand’s domestic politics and the lack of trust following the border clashes.

Hun Manet, however, is counting on a different outcome. Cambodia does not have an established offshore oil and gas sector, so a successful project would provide the government with new budget revenues, generate business for ports and create opportunities to attract foreign investment. The need for new energy sources became particularly apparent in 2026. According to the World Bank, higher prices for imported fuel increased costs for Cambodian businesses and households, while a 10% rise in fuel prices could increase the poverty rate by 1.4 percentage points.

At the same time, Phnom Penh cannot turn the estimated resources into revenue on its own. Cambodia’s first oil project, the Apsara oil field, was halted in 2021 after its operator, KrisEnergy, began liquidation proceedings. Actual production was significantly lower than projected, and the company was unable to service its debts. Following the failure of the Apsara project, potential investors will require more accurate data on the reserves before committing funds to new drilling. However, geological data alone are not enough. Bangkok and Phnom Penh need to agree on who will issue the licences, which legal framework will govern the operator’s activities, and how the revenues will be shared.

The losses suffered by border businesses showed that mutual economic interdependence does not, by itself, constrain governments. After border crossings were closed in July 2025, the volume of cross-border trade fell by 97.5%. The Thai government initially estimated the costs of evacuation and property damage at more than 10 billion baht, excluding losses resulting from the suspension of trade. Shops, transport companies, hotels and manufacturers in the border provinces lost revenue, yet Bangkok and Phnom Penh did not lift the restrictions. For energy companies, this was therefore a warning that in a new crisis, governments could suspend economic cooperation even at significant cost to their own businesses.

How the border crisis changed Thailand’s domestic politics

Part of the land border between Cambodia and Thailand remains unresolved, as Bangkok and Phnom Penh have different interpretations of maps drawn in the early 20th century during French colonial rule in Cambodia.

The clash on 28 May 2025, in which a Cambodian soldier was killed, quickly became a source of domestic political conflict in Thailand. The government of Paetongtarn Shinawatra, daughter of former prime minister Thaksin Shinawatra, sought to contain the escalation through direct contact with the Cambodian authorities. At the same time, the government’s opponents urged a tougher response and accused the Shinawatra family of having overly close ties with Hun Sen, who led Cambodia for 38 years and is now the president of the Senate and the father of Prime Minister Hun Manet.

On 15 June, Paetongtarn called Hun Sen to discuss the disputed border. During the conversation, she referred to him as “uncle” and made critical remarks about the Thai military commander in the border area. Hun Sen, however, released a recording of the call. Her domestic opponents immediately seized on her referring to Hun Sen as “uncle” and her criticism of the Thai border commander to accuse the prime minister of being overly accommodating towards Cambodia and disregarding the position of her own military. Paetongtarn’s explanation that she had been trying to prevent another clash could no longer bring the controversy back to a purely diplomatic context.

The Bhumjaithai party took advantage of the scandal to leave the governing coalition. Its relationship with Paetongtarn’s Pheu Thai party had already deteriorated before the leaked recording. The coalition partners had clashed over control of the Ministry of the Interior, while several Bhumjaithai figures were under investigation over alleged manipulation of the Senate elections. The phone call gave the party’s leader, Anutin Charnvirakul, an opportunity to leave the coalition while framing the move as a defence of Thailand’s sovereignty and military. In doing so, the party sought to distance itself from responsibility for the government’s unpopular decisions while also gaining grounds for a political attack on its former coalition partners.

The Thai military, conservative senators and nationalist groups in the streets also stepped up pressure on Paetongtarn. Senators petitioned the Constitutional Court, while pro-military groups called for her resignation. On 29 August, the court ruled to remove Paetongtarn from office as prime minister, finding that her conduct during the conversation violated ethical standards. The border dispute thus gave opponents of the Shinawatra family grounds to once again use judicial and parliamentary mechanisms against an elected government. After leaving the coalition, Bhumjaithai became the leading contender to form a new majority, and its leader, Anutin, became prime minister in September.

The subsequent border clashes with Cambodia helped Anutin reinforce his image as a prime minister who supports the military and refuses to make concessions to the neighbouring country. During the February 2026 elections, Bhumjaithai built its campaign around strengthening national security and won the largest number of seats in parliament. However, the party failed to secure an outright majority and had to seek partners to form a new coalition, leaving Anutin dependent on conservative forces, provincial politicians and the military, all of whom supported his hard-line stance.

Under these circumstances, negotiations with Cambodia became a test of Anutin’s own campaign promises. A concession that could have been justified on economic grounds would have given his opponents an opportunity to accuse the government of inconsistency. Bhumjaithai therefore included the cancellation of “Memorandum 44” in its political platform. In fact, the party turned a dispute over a relatively obscure document into a commitment to voters, making the new government’s credibility dependent on keeping that promise.

What the cancellation of “Memorandum 44” changed

The 2001 memorandum did not determine the maritime boundary between Cambodia and Thailand. Instead, it divided the disputed area into two parts and set out what the two sides were to do in each. North of the 11th parallel, the governments were to negotiate the boundary. South of it, they could work towards joint development of hydrocarbon resources. The two issues were addressed simultaneously. This allowed the two sides to work towards future resource development without waiting for a final agreement on the entire shelf.

The area of overlapping Cambodian and Thai maritime claims in the Gulf of Thailand. Source

After the memorandum was cancelled, Anutin’s government abandoned the parallel discussion of the maritime boundary and joint development. Bangkok insists that the two countries must first determine the boundary and only then negotiate the development of the fields. Until this is done, Cambodia will not be able to proceed with joint development. Thailand, in turn, has no reason to agree to the allocation of resources and revenues before reaching an agreement on the shelf that it considers acceptable.

At the same time, the Thai government has not abandoned negotiations altogether. Following the cancellation of the memorandum, Bangkok said it would continue the dialogue in accordance with the UN Convention on the Law of the Sea and established a technical and legal committee. The government thus presented its decision as a change in the negotiating process rather than a rejection of a peaceful settlement.

As part of this new strategy, the Thai government offered Cambodia to clarify whether it remained interested in joint resource development. Only after that would Bangkok be prepared to discuss a new framework for negotiations. Phnom Penh, however, decided not to wait for its neighbour to prepare a new bilateral proposal. The Cambodian government initiated conciliation proceedings under the UN Convention on the Law of the Sea, requiring Thailand to present its position to a conciliation commission. Thus, Bangkok succeeded in cancelling the old document, but Phnom Penh’s initiative has put forward a new negotiating format that will be harder for Thailand to formally reject.

Why Cambodia turned to an international commission

The Cambodian government had been preparing to use the UN Convention on the Law of the Sea even before the memorandum was finally cancelled. On 6 February 2026, Cambodia ratified the Convention. Initially, Phnom Penh reserved the right not to submit disputes over maritime boundaries to compulsory judicial or arbitral proceedings. On 26 May, the government withdrew that part of its declaration. The sequence of decisions suggests that Hun Manet was not simply reacting to Bangkok’s actions but was laying the legal groundwork in advance for a new form of negotiations.

Cambodia could not refer the dispute to a court without Thailand’s consent either. When Thailand ratified the Convention in 2011, Bangkok excluded disputes over maritime boundaries from procedures that result in a binding decision. Therefore, referring the dispute to the International Court of Justice or arbitration would have required the separate consent of the Thai government, while Anutin insisted on bilateral negotiations. ASEAN mediation also depended on the willingness of both sides and could not produce a decision on the disputed shelf. Unilaterally issuing licences for exploration of the fields would not solve the problem either: companies would simply be unwilling to invest in the disputed area without clear rights to extract the resources, while the arrival of drilling vessels could trigger a new confrontation.

The Convention left Phnom Penh with another option. Cambodia could request the establishment of a commission of five independent experts before which both countries would present their positions. Thailand is required to participate in the commission’s proceedings, although it is not obliged to accept its final recommendations. This mechanism is known as compulsory conciliation.

This choice reflected Cambodia’s position. Returning to bilateral negotiations on Bangkok’s proposed terms would have meant accepting that the boundary must be determined first, while the issue of resource development would be left for subsequent negotiations. Cambodia had no way to compel Thailand to speed up the process. The conciliation commission, by contrast, at least sets deadlines, hears the parties’ legal arguments and prepares a report that can serve as a basis for continuing the negotiations.

For Hun Manet, the legal route was also safer domestically. The prime minister could show that he had rejected Thailand’s new terms while avoiding another military confrontation. In a special address on 2 June, he presented the procedure as a means of defending Cambodia’s sovereignty through international law. Phnom Penh pointed to the experience of Timor-Leste, which used a similar commission in its dispute with Australia and subsequently concluded a maritime boundary treaty. This example gave Cambodia reason to believe that the experts’ recommendations could help a smaller state negotiate with a more powerful neighbour.

Bangkok initially criticised Cambodia’s decision as premature, but on 19 June agreed to participate and appointed two members of the commission. Once the commission is fully constituted, the experts will have approximately twelve months to prepare their report. Thailand has limited the scope of its participation to the maritime boundary issue and stressed that the recommendations will not be legally binding.

The US, China and the limits of ASEAN mediation

The United States, China and ASEAN used different tools to influence the conflict, but none of them had sufficient leverage to control its course independently. Donald Trump followed his established approach of linking trade negotiations to an end to the fighting: Washington warned Phnom Penh and Bangkok that it would not conclude trade deals with countries that continued to fight, and after the ceasefire, it cut tariffs on goods from both countries from 36% to 19%. This leverage changed the governments’ short-term calculations, but the United States did not take responsibility for overseeing compliance with the agreement.

Malaysia, as chair of ASEAN, took over the operational side of the conflict settlement. Anwar Ibrahim convened the talks, while Cambodia and Thailand agreed to allow groups of military attachés from ASEAN member states to enter the process. The observers documented violations separately on the territory of each country, but had no authority to demand troop withdrawals, determine inspection routes independently or refer incidents for mandatory review. As a result, when fighting resumed in December, a political decision by Malaysia to convene the foreign ministers and a new agreement between the two sides’ military representatives were again required. ASEAN provided a channel for returning to negotiations, but did not establish a permanent procedure that would be triggered automatically when a ceasefire was violated.

China acted in parallel through bilateral dialogue with the two governments. Wang Yi held separate talks with the foreign ministers, a special Chinese envoy conducted shuttle diplomacy, and Beijing brought together Cambodian and Thai diplomats and military officials in Yunnan. China supported de-escalation, while its role was primarily to preserve its own channel of influence and prevent Washington from monopolising the role of external mediator.

The transfer of the ASEAN chairmanship to the Philippines in 2026 also exposed an institutional problem within ASEAN. Ferdinand Marcos Jr. had to organise another meeting between Hun Manet and Anutin Charnvirakul at the summit in Cebu because ASEAN has no permanent mediation body with its own mandate, staff and response procedures. At the same time, the principles of consensus and non-interference make it easier for Cambodia and Thailand to accept a regional format, as they retain control over the process. However, both governments can limit observers’ access, postpone negotiations or narrow their agenda.

Scenarios for the crisis

The baseline scenario is a managed stalemate. The conciliation commission under the UN Convention on the Law of the Sea prepares its recommendations, while the Philippines maintains political contact, but Bangkok refuses to discuss joint resource development until the boundary is determined. Thailand can afford to delay because it already has existing production and import contracts in place, while Cambodia continues to lose valuable time for attracting investment. In this scenario, ASEAN helps prevent the dispute from escalating into an open crisis without addressing the underlying causes of the deadlock.

The limited-agreement scenario will become possible if the commission’s report gives Anutin’s government the political cover it needs to return to technical negotiations. Bangkok and Phnom Penh would again separate the issue of maritime delimitation from economic cooperation by agreeing on a temporary exploration regime, a joint body and a revenue-sharing formula without abandoning their territorial claims. ASEAN can provide a platform for the talks, draw on Malaysia’s experience with joint development zones and organise monitoring. Any such arrangement, however, will require the direct agreement of the Cambodian and Thai governments.

The negative scenario would be a new border incident that the Thai military, Bhumjaithai or the Cambodian authorities could use to mobilise domestic support. Bangkok may then freeze the commission’s work and restrict observers’ access, while Phnom Penh may step up international legal pressure. ASEAN will again convene talks after the escalation, while the outcome will depend on US trade leverage and China’s dialogue with the authorities of both countries.

Conclusions

Thus, the gas fields should have pushed Cambodia and Thailand towards a compromise. But after the border clashes in 2025, they instead became an obstacle to a quick agreement, because without such an agreement Cambodia cannot attract investors or begin exploration.

The cancellation of “Memorandum 44” changed more than just the formal framework for negotiations. The document allowed the two sides to discuss maritime delimitation and joint resource development simultaneously. Thailand now insists that the maritime boundary must be determined first, even though this is precisely the issue the two sides have failed to resolve over the past twenty-five years.

ASEAN may support the ceasefire, but the decision to stop the fighting remains with Bangkok and Phnom Penh. Each new incident effectively brought the process back to square one, as ASEAN has still not established a permanent response procedure.

The involvement of the conciliation commission will most likely bring the two sides back to technical negotiations, but it will not by itself pave the way for resource development. For an agreement to be reached, the Thai government needs a formula that it can present domestically as protecting the country’s maritime rights, while Cambodia needs guarantees that the negotiations will not drag on for decades more. Until such a formula is found, ASEAN will have to keep bringing the two sides back to the negotiating table after each escalation.