MANILA, Philippines – The Department of Energy (DOE) assured that the country has enough oil supply for the coming weeks following the attacks in two large oil production facilities in Saudi Arabia that reduced global supply.
According to DOE Oil Industry and Management Bureau director, Assistant Secretary Rodora Romero, the country’s oil supply remains sufficient to keep the economy running.
Romero also assured the government is monitoring the situation and measures have been prepared to prevent sudden local petroleum price hikes and keep the country from experiencing a possible oil crisis.
“Ang isang paghahanda is ini-ensure namin with the oil companies na compliant sila sa minimum inventory requirement. Ni-revive na rin ulit o binigyan ng instruction ni (DOE) Secretary (Alfonso) Cusi ang Philippine National Oil Company Energy Exploration na talagang maging involved sa importation ng petroleum products,” she said.
Reuters reported that Saturday’s attack on Saudi Arabia’s key oil production facilities has halved the kingdom’s oil output, creating the biggest disruption to global oil supplies in absolute terms since the overthrow of the Iranian Shah in 1979, International Energy Agency data show.
The attacks reduced global supply by 5.7 million barrels per day or equivalent to 5 percent of world crude oil production and sent oil prices soaring, Reuters reported.
Romero said the Philippines only imports 12 percent of oil from Saudi Arabia while the rest comes from the United Arab Emirates.
But should the situation worsen, the energy official said the United States government and members of the Organization of Petroleum-Exporting Countries (OPEC) have pledged to tap into their strategic petroleum reserves to keep the market well supplied.
“In the event na hindi nga maibalik ang sabi ng U.S. maglalabas siya ng supply dun sa kanyang strategic petroleum reserve tapos at the same time yung other OPEC countries rin ang sabi nila sakaling kapusin at di makabalik agad yung 5 million barrels per calendar day ng Saudi Aramco mag-iincrease din ng production ang other OPEC countries,” Romero said.
Despite assurances of enough supply, several local oil companies have warned that the effects of the crude disruption in Saudi Arabia will still be felt in the country in the form of oil price hikes.
Oil firms have estimated that local pump price hikes may jump by P3 per liter.
In case this happens, the DOE said they will meet with local oil companies to ask them to implement the price increase in a staggered basis so as not to further burden motorists. RRD (with details from Correspondent Joan Nano; with a report from Reuters)
Saudi Arabia is possibly able to stabilize the international energy market, said a Saudi analyst on Sunday in Riyadh, capital city of the country.
Saudi Arabian oil facilities were attacked on Saturday, causing half of the kingdom’s oil production capacity disrupted.
Yemen’s Houthi rebels claimed responsibility for the attacks, saying 10 drones targeted state-owned Saudi Aramco oil facilities in Abqaiq and Khurais.
During an interview with China Central Television (CCTV), Abdul-Rahman Al-Murshed, the analyst, said the attack will not only have an impact on the international crude oil market but also complicate the already tense situation in the Gulf.
Murshed pointed out that this attack will not only have an impact on the Saudi national economy but also bring instability to the world economy.
However, thanks to production cuts to prop up prices in recent years, Saudi Arabia now has some spare oil capacity, and with nearly 200 million barrels of oil in reserve, Aramco has the ability to minimize the impact of the attack on the international energy market.
“As the world’s leading exporter of crude oil, Saudi Arabia has the strength and ability to stabilize the market. When the production of some oil-producing countries such as Iraq and Iran declined before due to different reasons, Saudi Arabia has taken measures to make up for the shortage of supply within a short period of time, mainly thanks to the Saudi spare capacity and huge oil reserve,” he said.
The U.S. put forward a plan to establish a Middle East Security Alliance in September 2018 to members of the Gulf Cooperation Council as a measure against Iran, thus aggravating the regional situation, said Murshed.
The attack is likely to prompt Saudi Arabia to join the alliance, and in turn, the various forces in the region would show more intense confrontation, he said.
“Saudi Arabia stands with any initiative that will preserve the security and integrity of the region and banish the specter of war and confrontation with Iran. Saudi Arabia, therefore, supports any initiative that promotes peace in the region in any way. So I’m sure there will be many understandings and many alliances that will enhance security and peace in this region,” he said. (REUTERS)
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