The Philippines is experiencing a “speculative effect” in financial markets amid escalating tensions in the Middle East, particularly after U.S. and Israeli attacks on Iran, a political analyst said Wednesday.
Speaking on DAILY TRIBUNE’s digital show Straight Talk, international relations analyst and De La Salle University professor Renato de Castro tied local market moves and possible crude oil price increases to global uncertainty.
“This is my take. What we're experiencing right now, as we often experience every time you have a crisis in the Middle East … the infatada against Israel in the early 21st century, then what happened last year, you always have what I call the speculative effect,” he said.
“The expectation that the global supply of oil will be affected by the … conflict. [T]his dramatic increase in the price of petroleum products. But again, the point is, this is psychological,” he added.
De Castro said the current situation is “speculative,” noting that the Middle East no longer supplies the same amount of oil to global markets as in the past.
He also said that the United States is the largest oil producer in the world and not as dependent on Middle Eastern supply, and suggested recent U.S. actions are aimed at limiting China’s access to Iranian oil.
“the United States is not actually dependent on Middle Eastern oil. It could tap oil from Canada, could tap oil from its own strategic reserve,” he explained.
“[W]ith the after what happened to President Maduro … the United States, basically having control of the oil production of Venezuela, [t]he United States is primarily secure,” he added.
The analyst warned that disruptions would be more felt in East Asia and especially by China.
The analyst said that the U.S. strategy, which he called a “calculated risk” on Iran, aims to prevent China from accessing Iranian oil, and he added that this “is most likely part of the U.S. President Donald Trump administration's agenda.”
Sufficient stock
President Ferdinand Marcos Jr. said Tuesday that the Philippines has sufficient oil stockpiles to weather short‑term supply disruptions, estimating reserves to last for two months.
“We have stockpiles that are approximately 50 to 60 days in terms of gasoline, fuel oil, and kerosene,” Marcos said.
He said the government is prepared to roll out fuel subsidies if oil prices exceed $80 per barrel.
Energy Secretary Sharon Garin has earlier warned that oil prices most probably will move upwards.