Phl twitchy over U.S. posture

We are seeking to ensure that the Energy family will be sufficiently prepared to face the potential impact of this unfortunate incident, if any, on the country.

SATELLITE image of the fires following drone strikes on Saudi Arabia oil giant Aramco taken by NASA. The United States blames Iran for the attacks, raising speculations of an armed confrontation peaking after the long-drawn tension between the two countries due to the Islamic state’s nuclear program. AFP

The Philippines gears up for any possibility that may arise from a possible US military response to attacks on Saudi Arabia oil infrastructure that Washington pointedly blamed on Iran.

US President Donald Trump warned that the US was “locked and loaded” to potentially respond to the drone attacks, which slashed Saudi oil production by half and led both the kingdom and the United States to announce they may tap their strategic reserves.

“Saudi Arabia oil supply was attacked. There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!” Trump tweeted.

But China on Monday urged the US and Iran to “exercise restraint… in the absence of a conclusive investigation or verdict.”

The Tehran-backed Huthi rebels in Yemen, where a Saudi-led coalition is bogged down in a five-year war, claimed Saturday’s strikes on two plants owned by state energy giant Aramco.

But US Secretary of State Mike Pompeo pointed the finger squarely at Tehran, saying there was no evidence the “unprecedented attack on the world’s energy supply” was launched from Yemen.

“The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression,” the top US diplomat said.

That drew an angry response from Tehran, where Foreign ministry spokesman Abbas Mousavi said: “Such fruitless and blind accusations and remarks are incomprehensible and meaningless.”

The White House said on Sunday that Trump may still meet Iran President Hassan Rouhani at the United Nations meeting in New York next week, but Tehran said Monday it did not think “such a thing would happen.”

Baghdad, caught between its two main allies — Tehran and Washington — also denied any link to the attacks amid media speculation that the drones were launched from Iraq.

Saudi de facto ruler Crown Prince Mohammed bin Salman has said the kingdom is “willing and able” to respond to this “terrorist aggression.”

The war stance was quickly felt in the Philippines, with Department of Energy (DoE) Secretary Alfonso Cusi on Monday revealing that the agency is “closely monitoring” the fallout from drone attacks on the center of Saudi Arabia’s oil industry.

Cusi also confirmed convening an emergency meeting of the DoE and related agencies over the weekend to discuss the developments in the Middle East. He noted that oil supply from the world’s top producer “will be reduced.”

The Energy chief added that the Philippines has enough reserves for at least 30 days, as required by law.

“We are seeking to ensure that the Energy family will be sufficiently prepared to face the potential impact of this unfortunate incident, if any, on the country,” Cusi said. “Rest assured that the DoE, together with the entire Energy family, is closely monitoring the situation, and will keep the public properly informed of developments on the matter.”

To recall, Saudi Arabia’s 2.3 million barrels per day (bpd) of effective spare capacity in August accounted for more than two-thirds of OPEC’s on-hand supply of 3.2 million bpd, according to the International Energy Agency, with the rest coming from Kuwait and the United Arab Emirates.

Meantime, Foreign Brief analyst Max Klaver said oil will trade higher due to security concerns following the attack, but the price spikes will unlikely be felt at pump stations this week.

“I don’t think consumers will be feeling this tomorrow, maybe not even this week, beyond that in the medium to long term, it’s very possible,” Klaver said in a separate interview.

The drone attacks on plants in the heartland of Saudi Arabia’s oil industry hit the world’s biggest petroleum-processing facility as well as a nearby oil field, and they account for about 50 percent of Saudi Arabia’s oil output, or five percent of daily global oil production. It could take weeks before the facilities are fully back on line.

The attacks sent Brent Crude oil prices surging by 10.88 percent or $6.55 to $66.77 per barrel, while West Texas Intermediate increased by 9.64 percent or $5.29 to $60.14 per barrel.

Industry players in the Philippines also decided to increase the cost of petroleum prices by as much as P1.35 per liter on gasoline and by 85 centavos for diesel.

Phoenix Petroleum Philippines, Pilipinas Shell Petroleum Corp., Seaoil Philippines Inc. and PTT Philippines Corp. announced on Monday that they will increase the cost of gasoline by P1.35 per liter and diesel by 85 centavos. Shell will also raise kerosene prices by P1.00 per liter.

Adjustments from all companies are effective 6 a.m. today, Tuesday.

Chevron Philippines Inc., which holds the Caltex brand, said it will raise gasoline prices by P1.35 per liter, by 85 centavos for diesel, and by P1.00 for kerosene effective Tuesday, 12 a.m.

Meanwhile, Cleanfuel said it will also hike pump prices of diesel by 85 centavos and gasoline by P1.35 per liter. The adjustments will take effect on Wednesday at 6 a.m.

Petro Gazz, for its part, said it will implement an 85-centavo increase in diesel and a P1.35 hike in gasoline prices.

Cusi told reporters that it remains premature to say that the attack would have an adverse impact on the Philippine market, although he said that any impact will likely be felt on Tuesday next week.

He said the DoE is closely monitoring the developments in the international market until Friday to fully assess any impact on local oil prices.

Cusi said the department is set to meet with oil firms this week to look into the sufficiency of inventory levels.

“(We) will keep the public properly informed of developments on the matter,” he said.

“We are seeking to ensure that the Energy family will be sufficiently prepared to face the potential impact of this unfortunate incident, if any, on the country,” he added.

Cusi had earlier talked with the DoE’s Electric Power Industry Management Bureau and Oil Industry Management Bureau, the National Electrification Administration, National Power Corp., and Philippine National Oil Company-Exploration Corp. to assess the issue.

Locally, year-to-date adjustments stand at a net increase of P4.16 per liter for gasoline, P3.17 per liter for diesel and P1.01 per liter for kerosene.

Meanwhile, Foreign Affairs Secretary Teodoro Locsin Jr. pointed out that the Saudi Arabia incident will affect the Philippines “deeply,” stressing that an oil shortage or steep rise in oil price “will rock the Philippine boat and tip it over.”

In a social media post, Locsin said “This is serious. It will — not could — affect us deeply; to put it bluntly, an oil shortage or steep rise in oil price will rock the Philippine boat & tip it over,” said Locsin on his Twitter post. “So, everybody shut the f*ck up and focus. No more clowns. Declaring state of emergency won’t save our economy but kill it.”

Presidential spokesman Salvador Panelo noted that the Palace will wait for a report from Defense Secretary Delfin Lorenzana, National Security Adviser Hermogenes Esperon Jr. and Cusi on the matter.