Oil is required for nearly all Thai dishes. Thai cooks commonly use coconut oil, palm oil, peanut oil, or soybean oil; traditionally, lard was also used in Thai cooking. These types of oil are low-smoke, as is desirable for frying or grilling, and they do not break down quickly. Peanut oil is often used for stir-frying and deep-frying. Coconut and palm oil have the characteristic of being mostly solid at room temperature. Look for organic oils, sustainably-produced oils, and non-GMO oils.
Coconut oil can impart some flavor to the dishes that can meld well in Thai cuisine. It has a nutty and slightly sweet flavor. Depending on the way it is refined, coconut oil has a smoke point of 350 to 400 F, the same or lower than olive oil. It's good for mid-temperature cooking and may not work as well if you are stir-frying at high heat. Coconut oil is attaining new popularity after being disdained for having a high level of saturated fat. Look for unrefined coconut oil that hasn't been partially hydrogenated. It's less prone to spoilage and can be kept for a longer time.
Palm oil has a high smoke point of 450 F, which is very desirable for stir-frying and grilling. It doesn't add flavor to the dish like coconut oil. It's made by pressing the fruit of the oil palm tree. Unfortunately, it's associated with negative impact on the environment. Areas of Borneo, Sumatra, Thailand, and Bali have been deforested in favor of oil palm plantations, with a loss of habitat for orangutans and other species. You may want to look for palm oil that is labeled as sustainable by the RSPO (Roundtable on Sustainable Palm Oil).
The advantage of peanut oil is its high smoke point of 450 F. It can be used in preparations requiring stir-frying, grilling and even deep-frying. It has a significant peanut flavor, which must be considered when you are using it for any dish. As peanuts are used in dishes such as satay or used as a garnish, peanut oil is appropriate in those cases. You must also consider whether you are serving anyone who may have a peanut allergy. If you are traveling to Thailand and have a nut allergy, you will have to use extreme caution due to the widespread use of peanut oil and other nut oils.
Soybean oil is readily available in Bangkok and widely used. Refined soybean oil has a high smoke point of 460 F, good for use in stir-frying and grilling.
Alternative Oils for Thai Cooking
Other good alternatives include safflower, sunflower, corn, peanut, and other nut oils. Note that olive oil should not be used for high-temperature frying (including stir-frying), as it breaks down easily and may even turn toxic. Enjoy olive oil at room temperature in salads and with bread, or for roasting vegetables at oven temperatures under 300 degrees.