Petron Corp.’s first-quarter net income fell 56 percent to P1.8 billion from P4 billion a year earlier, dragged by refinery disruptions and a sharp surge in global oil prices tied to Middle East tensions.

The country’s largest oil company said in a regulatory filing on Tuesday that reduced output from its facilities in the Philippines and Malaysia, combined with rising crude costs, significantly squeezed margins during the period.

Operations at its Port Dickson Refinery in Malaysia have been halted since November 2025 after Tropical Storm Senyar damaged its product jetty, while the Petron Bataan Refinery in Limay underwent scheduled maintenance in the first quarter.

At the same time, geopolitical tensions intensified supply pressures. The United States-Israel conflict with Iran disrupted flows from the Middle East, pushing Dubai crude prices to $129 per barrel in March—almost double February’s $68. 

For the quarter, Dubai crude averaged $86 per barrel, up 12 percent year-on-year.

Notably, even as revenues climbed 27 percent to P246 billion, operating income dropped 36 percent to P6.1 billion, reflecting higher product costs and limited refining output.

Sales volume slipped 7 percent to 25.7 million barrels from 27.6 million barrels previously, as production constraints prompted the company to scale back exports and prioritize domestic retail and commercial demand.

“The geopolitical developments in the Middle East have presented severe supply disruptions in our industry. As we work to manage its impact on our business, our main priority has been to secure adequate fuel supply and make sure we can continue to meet the demand,” Petron President and CEO Ramon S. Ang said. 

The company added that its crude diversification program allows the Bataan refinery to process oil beyond its usual Middle East supply mix, helping sustain operations under volatile conditions.

Petron said it has tightened cost controls and diversified sourcing, procuring crude and finished products from suppliers outside the conflict zone to stabilize supply.

“As the Philippines' sole remaining oil refiner, we recognize our responsibility to help address the nation's fuel challenges. Together, we will navigate this crisis and alleviate the concerns of our fellow countrymen,” Ang said.