Had foresight and will prevailed, the country would have less to worry about in the face of another oil crunch as a result of the ongoing war between Israel and Iran.

Israel warned of a “prolonged campaign” while Tehran ruled out further nuclear talks with the United States until Israel halts its attacks, indicating that a resolution to the conflict remains far off.

The backlash on the economy will mainly be felt in fuel prices, which are expected to rise, and their level may exceed the record highs at the start of the Russia-Ukraine conflict.

Retail broker OctaFX said the risk of a major oil supply shock is increasing. It indicated that the price of the “black gold” may skyrocket, potentially derailing the global economy.

Caribbean-based OctaFX noted that when Israel and Iran exchanged airstrikes, the prices of Brent and West Texas Intermediate (WTI), the world’s two major oil benchmarks, rocketed to five-month highs as investors anticipated potential supply disruptions.

Oil prices remain elevated even as there are telltale signs the parties may be willing to negotiate.

A financial market analyst at the brokerage warned that the worsening conflict has ominous potential to propel crude prices to unprecedented levels.

It may unleash a cascade of detrimental effects that could, “in the most dire of scenarios, cause a major global economic crisis.”

The Philippine government’s response, thus far, to the looming crisis is to appeal to oil companies to spread out price increases, which would have little effect in an extended period.

The previous administration had proposed setting up a strategic petroleum reserve to take advantage of the periodic low prices of petroleum to create a stockpile.

A plan was presented to the leadership at the Department of Energy (DoE), but it was turned down, citing the cost of the program and the shift to green energy.

The migration to green energy, thus far, has turned out to be a dud as fuel for most vehicles and power plants would remain carbon-based for some time until technology for a cheap, long-term storage system using batteries is rolled out.

The proposal for an oil reserve would have had the private sector put up the storage facility.

Discussions were started on the use of the excess capacity of oil companies, which received the support of the industry.

The DoE under the new administration shelved the plan, stating that a strategic petroleum reserve would be expensive and the onshore areas were not suitable for storage facilities.

The country does not have empty oil fields that could serve as petroleum storage facilities, it insisted.

The requirement then was for a 40-day reserve, but currently, due to costs, oil distributors stockpile only up to a little more than a week, exposing the country to a supply squeeze.

Geopolitical conflicts are growing and a strategic program to soften the impact of supply disruptions and price spikes will have to be put in place.

The reality is that the country remains a net importer of fuel and is very vulnerable to the ongoing geopolitical flare-ups.