MANILA, Philippines – The Philippine government gave assurances to its citizens that the country’s oil supply will be stable despite the conflicts in Saudi Arabia, from where it sources the bulk of its fuels.
“We have other sources, [even for] refined [oil],” Energy Secretary Zenaida Monsada told reporters on Friday, January 8, when she joined President Benigno Aquino III in inaugurating the AboitizPower baseload power plant in Davao. (READ: Aquino inaugurates AboitizPower’s P35-B Davao baseload power plant)
Monsada also pointed out that the Association of Southeast Asian Nations (ASEAN), to which the Philippines belongs, has a supply security agreement that should dismiss fears of oil shortage.
So far, she said, the security issues caused by the conflict between Saudi and Iran have not caused increases in oil prices. “In fact, we are expecting another rollback next week."
Tensions are rising in the Middle East due to the conflict between Iran and Saudi Arabia, which erupted with the execution of Shiite cleric Sheik Nimr al-Nimr. (READ: Timeline of the latest Iran-Saudi crisis)
'Nothing to worry about'
President Aquino said that oil prices had reached a “historic low” at below $40 per barrel at some point, comparing it to $200 per barrel before.
Crude oil prices on January 6 plunged 6% or below $35 per barrel for the first time since 2004, Reuters reported.
The descent was stoked by worsening Chinese economic data, the world's number 2 oil consumer, and a fierce row between Saudi Arabia and Iran that some say may be more bearish than bullish, the report added.
The determination by Saudi Arabia, the world's biggest exporter, to defend its market share despite a global glut has helped drive oil prices to their lowest in 11 years, Reuters wrote.
“Maraming gustong magbenta…. Ang demand more or less constant. Parang buyer’s market ngayon as opposed to seller’s market,” Aquino said. (There are more who want to sell [while] the demand remains more or less constant. It’s like we have a buyer’s market now, as opposed to seller’s market.)
“So, huwag tayong kabahan doon. Palagay ko marami tayong mabibilhan,” the President said. (So, let’s not worry about [oil supply]. I think we can buy from many other sources.)
In another report, Reuters noted that the collapse of Saudi Arabia-Iran relations puts an end to speculation that the Organization of the Petroleum Exporting Countries could somehow agree production curbs to lift the price of oil anytime soon.– Rappler.com
Oil barrels image from Shutterstock