Crisis not yet over, but oil sourcing options have improved — Garin

THE fighting in the Persian Gulf remains subject to unexpected flare-ups, Energy Secretary Sharon S. Garin said, indicating that fuel prices could still be volatile depending on developments out of Iran.

However, she added that countries have developed alternative options for sourcing petroleum products since the fighting began.

“We still have to remain vigilant because many of our suppliers still source their fuel from the Middle East. But the situation is better now because our suppliers already know where else to procure. But still, that means we’re still not out of the crisis,” Ms. Garin said.

New US strikes on Iran prompted Tehran to declare the Strait of Hormuz closed to all traffic, though the US denied that traffic through the key waterway has been restricted.

“I have yet to ,” Ms. Garin said. “In relation to the price, we have to watch out for the supply also. We have been assured that we have suppliers (who are ) consistent… If we have long-term contracts they will be honored. But if this is prolonged, I don’t know how long everybody can sustain it.

“I think that (closure) will again spike the prices more than anything else,” Ms. Garin, speaking on the sidelines of an event in Catanduanes on Thursday, added: “My concern is more on the supply rather than the price. Consumers seem to have gone back to their old habits, so we need to start conserving fuel again,” she said.

As a net importer of petroleum products, the Philippines is vulnerable to global crude price swings. Around 98% of the country’s crude imports are sourced from the Middle East.

When the waterway was previously closed, the Philippines scrambled to find alternative sources while dealing with surging domestic oil prices.

Ms. Garin said before the latest strikes that fuel prices were approaching “pre-war levels” of around P50-P60 per liter.

Leo P. Bellas, president of Jetti Petroleum, Inc., said global oil prices are expected to rebound following the renewed escalation of the conflict in the Middle East.

“The full closure of the Strait of Hormuz, with Iran threatening to attack any vessel that attempts passage, and the possible retaliatory attacks by Tehran on energy infrastructure of US-allied Gulf states, have fueled worries of severe supply disruption,” he said via Viber.

“Unless diplomatic efforts prevail and the crisis de-escalates, prices will likely go higher,” he added. — Sheldeen Joy Talavera