Why passage of PH fuel supply through Strait of Hormuz won’t lower oil prices quickly

Prices of petroleum products will likely continue to remain high even if Iran has allowed oil supplies bound for the Philippines to safely pass through the Strait of Hormuz.

According to an explainer by GMA News, Iran’s decision to grant “safe, unhindered, and expeditious passage” to Manila-bound oil supplies through the waterway will help secure the country’s oil supply.

But even if the Philippines has enough fuel, prices of oil products will remain high because only a few ships are able to pass through the Strait of Hormuz – and because global oil supply has also decreased.

READ: LIST: Pump price hikes on Tuesday, April 7, 2026

At least 25% of the world’s oil supply passes through the Strait of Hormuz, which is also critical to the Philippines’ fuel supply because 98% of its crude oil imports are from the Middle East.

According to the Department of Energy’s (DOE) earlier statements, 97% of liquid petroleum products and 91% of LPG in the country are from refineries in other Asian countries, but these are also dependent on the Persian Gulf.

The explainer cited the International Energy Agency’s (IEA) oil market report on March 12 that Gulf countries cut total oil production by at least 10 million barrels per day due to the Middle East conflict.

The IEA noted that “in the absence of a rapid resumption of shipping flows, supply losses are set to increase.”

In addition, the price of Brent crude shot up to $109 per barrel from the previous $72 per barrel in the last five weeks since the war in the Middle East broke out. Brent crude is the basis of global pump prices.

Supply shocks and geopolitical tensions are factors in the price of Brent crude.

Another factor is market speculation or risk premiums, in which global investors hike oil prices if they expect threats to supply even if it has not yet actually happened.

It may be recalled that Energy Secretary Sharon Garin, on April 4, said the Philippines’ assurance of safe passage through the Strait of Hormuz is “a safe and preferential access” that will reduce risks of disruption in oil supply, increase protections to Philippine-linked cargo, and improve safety considerations for Filipino seafarers.

“We also want to manage expectations: This development will not immediately bring down fuel prices, nor does it resolve our long-term structural challenges in energy. Those remain priorities that we continue to address,” she added. — JMA, GMA News