MANILA(March 3) – International oil prices reaching USD100 per barrel due to the ongoing conflict in the Middle East is likely, but an official of a local fuel firm said domestic supply will not be an issue for now.
“The uncertainty on how long this fresh escalation could be sustained would likely put more upside risk to prices. It is likely that prices could be pushed to USD100/barrel and beyond if the current disruption to supply flows in the Strait of Hormuz will be prolonged,” Jetti Energy president Leo Bellas said in a Viber message to journalists on Monday.
He, however, said domestic oil players are compliant to local policies that require them to have at least 15 days of inventory.
“Most probably (we have) closer to 30 days’ worth of stocks,” he said.
Crude oil prices rose to its new eight-month high of USD75.33 per barrel in the morning session at the New York Mercantile Exchange Monday, but it went down to around USD72-level towards the end of the session.
Rizal Commercial Banking Corporation chief economist Michael Ricafort, in a report, noted that crude oil price peaked at USD78.40 per barrel in the previous attack by U.S. and Israel attack on Iran.
The increase in world prices, along with the weakening of the Philippine peso, “would lead to higher local fuel pump prices and some pick up in overall inflation,” he added.
Federation of Philippine Industries chair Beth Lee, in a statement, said the Middle East crisis is “not just a distant conflict — it is an inflationary shock that could affect Philippine households and industries if tensions persist.”
She said higher global oil prices will result in jumps in domestic oil prices, electricity and transportation fare.
She said local oil firms’ existing inventories may help stagger price adjustments and cushion the immediate impact on consumers, but noted that “this is only a short-term buffer.”
“If the conflict escalates or becomes prolonged, inventories will be replenished at higher global prices — resulting in sustained upward pressure on domestic fuel costs,” Lee said.
“For manufacturers dependent on imported inputs, this may translate into higher freight costs, longer transit times, and more expensive raw materials,” she added.
