Red Sea Tensions Spark Fears of Soaring Fuel Prices in Philippines

Pump prices are expected to increase to high levels once more if shipping in the Red Sea is continuously disrupted amid tensions between Yemen’s Houthi movement and Saudi Arabia, Department of Energy-Oil Industry Management Bureau (DOE-OIMB) director Rino Abad said Friday. Currently, Abad said that there is no actual damage reported yet in Saudi Arabia’s Petroline or the East-West oil pipeline, but once there is, shipping of around 6 to 7 million barrels of crude oil may be affected. “We have now returned to the P80 to P90 price range, and the persistent concern is no longer just limited to the Strait of Hormuz. A new concern is emerging, as the issue is now spilling over into the Red Sea,” Abad said in a Super Radyo dzBB interview. “As long as there is no actual damage to Saudi Arabia’s Petroline, I think we will just stay around P80 to P90… But what if something happens there? That’s when we might increase beyond the P80 to P90 price range—it could go higher than that,” he added. According to a Reuters report, Yemeni Foreign Minister-designate Afrah Al-Zouba said that the Houthi is seeking to replicate Iran's Hormuz Strait strategy in the Red Sea by disrupting shipping in the Bab el-Mandeb. The Red Sea has become a new front in the Iran war, with the Houthis taking an escalatory approach against Saudi Arabia by firing missiles and drones at the kingdom and declaring a blockade on Saudi shipping. Saudi Arabia, in return, has responded with airstrikes on what it said were Houthi military facilities. The DOE official described the development as a potential “game changer.” “That will be a game changer again. We’re only at the P80 to P90 price range now, but when the Petroline gets damaged, it may affect around 6 to 7 million barrels of oil that Saudi Arabia releases,” Abad explained. “If actual damage occurred, it seems like the adjustments would reach P10 to P12. We’ve already surpassed that figure now, so it seems that it will go even higher,” he continued. The DOE said Tuesday that the country's fuel stock remains steady and is expected to last for nearly 45 days.