Reports that Saudi Aramco, the world's largest oil producer has warned of an extremely low capacity of the precious fuel, should be a cause of concern for a global market still relying heavily on fossil fuels.
No less than Saudi Aramco CEO Amin Nasser admitted that the global oil market remains tight as the spare capacity of the precious commodity is extremely low.
"If China opens up, (the) economy starts improving or the aviation industry starts asking for more jet fuel, you will erode this spare capacity," he was quoted as saying.
He pointed out that oil prices could quickly spike once spare capacity is eroded. "There will be no space for any hiccup — any interruption, any unforeseen events anywhere in the world."
Global oil supply may struggle to keep pace with demand next year, as tighter sanctions force Russia to shut in more wells and several producers bump up against capacity constraints.
Countries of the European Union have agreed to ban 90 percent of the bloc's imports of Russian crude and oil products, to be phased out over the next six to eight months.
Experts believe global oil demand will continue to recover and, in the absence of further policy changes, is set to rise by end-2022 but gains are nowhere near the levels needed to prevent further stock draws.
Many are of the opinion that the world has reached Peak Oil, the time when more than half of all the petroleum on earth has been used up. It has come to the point when the world's rapidly shrinking petroleum reserves are causing rapidly rising fuel prices, wars, and diplomatic tension over the so-called black gold.
The possibility that oil may be found underneath the West Philippine Sea and South China sea has given rise to tensions among China and various claimants and has dragged western countries into the fray.
This has not spared the Philippines, one of the modest oil consumers but is already suffering from the global warming caused by mankind's excessive use of fossil fuel since the 19th century.
The Philippines has a major interest in the Spratly group of islands in the South China Sea, perhaps the last region in the world that holds any possibility of large untapped petroleum deposits.
Ownership of the Spratlys is contested by China, Malaysia, the Philippines, Taiwan and Vietnam.
China is the most optimistic nation regarding the Spratly oil potential. Its most moderate estimate is that the potential oil resources of the Spratly Islands and the Paracel Islands to the north could be as high as I.05 billion barrels of oil, implying that potential production levels for the Spratly Islands could be 1.4-1.9 million barrels per day.
Unless and until a resolution is found to settle the Spratlys conflict, the Philippines, experts say, urgently needs to develop alternate sources of energy, not only to free itself from steeply rising oil prices but also to decrease its own contribution to atmospheric carbon dioxide and global warming.
It can learn from Cuba, which underwent Peak Oil in the 1990s when the Soviet Union, its only source of oil, collapsed but has achieved a healthy, sustainable, organic agriculture without fossil fuels and inorganic fertilizers and pesticides. The Cubans successfully transformed their monoculture agriculture into local, diversified production of food and the health of its people has improved as a result.
We can learn valuable lessons from Cuba, a country that is remarkably similar to the Philippines in terms of its tropical, insular setting, susceptibility to hurricanes, and even its history as a colony of Spain.
The world, as shown by the Cuban example, is beginning to awaken to the fundamental reason behind the inexorably increasing prices of oil-based fuels. As is often the case, the Philippines and its government are slow to join this realization.
Meanwhile, increasing petroleum prices will inevitably continue to worsen the economy, quality of life, and social unrest.
