DOE downplays Israel-Iran tensions impact on fuel prices

The Department of Energy (DOE) on Friday brushed off the potential upward pressure on retail prices of petroleum resulting from the tensions between Israel and Iran.

“We will have to take a look at the actual impact, we should not engage in speculation at this point that will duly alarm our people,” Energy Secretary Raphael Lotilla said at a press conference in Taguig City.

The Energy chief noted that actual prices of petroleum are still far from the peaks “we have experienced since the start of this administration.”

“We have as high as more than $100 per barrel. But right now, even with the these incidents they have not spiked to that extent yet,” Lotilla said.

“Event if it reaches the higher levels, the likelihood of a significantly higher prices will be minimal,” he said.

A report by Reuters said Brent crude futures rose 9.07% to $75.65 a barrel on Friay, after Israel struck Iran.

Israel said early on Friday that it struck Iran, and Iranian media said explosions were heard in Tehran as tensions mounted over US efforts to win Iran's agreement to halt production of material for an atomic bomb.

Lotilla, however, said the Philippine government has no control of the situation.

“Let us hope that the passage to the Gulf of Hormuz is not going to be impeded. While Saudi Arabia has committed to an increase in oil supplies and has an alternative outlet in the Red Sea portion of its territory…  It has to pass through the Gulf of Hormuz,” the Energy chief said.

DOE Undersecretary Alessandro Sales, for his part, said that “in the medium term, the pressure is for oil price to be stable in that region.”

“When I say low, it’s between $60 and $70 [per barrel] because the OPEC+ has already made a decision to gradually ease the restriction of their supply … their own self-imposed supply restrictions,” Sales said.

“There are estimates that by next year because of this, loosening up of their restrictions, the world supply will be an ‘oversupply’ by close to a million barrels,” the DOE official said. — BAP, GMA Integrated News