By John Lester Naguna
As tensions escalate in the Middle East, the Strait of Hormuz has once again emerged as the focal point of global energy anxiety. For Filipino motorists and households, the closure or disruption of this narrow waterway thousands of miles away translates directly into higher oil prices, which may spark a chain reaction of pricier groceries and transport fare hikes.
The Department of Energy (DOE) confirmed Tuesday that while the Philippines does not import crude oil directly from Iran, its dependence on the Middle East and interconnected Asian refineries leaves it vulnerable to choke point politics—the use of narrow shipping lanes as geopolitical leverage to disrupt global trade.
What is the Strait of Hormuz?
The Strait of Hormuz is a narrow passage between Oman and Iran, connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. At its narrowest point, the shipping lane is only two miles wide.
Despite its size, it is the world’s most important oil transit checkpoint. Approximately 16% to 20% of the world’s total petroleum consumption passes through this strait daily. It is the primary artery for oil from Saudi Arabia, the United Arab Emirates, Kuwait, Iraq, and Qatar.
Why are we affected?
A common misconception is that the Philippines is safe from a Strait of Hormuz closure because it sources most of its finished products, like processed gasoline and diesel, from neighboring Asian countries.
However, Energy Secretary Sharon Garin explained that the regional supply chain is a domino effect.
“Refining countries in Asia, such as China, South Korea, Singapore, and Japan, source their crude oil from the Middle East,” Garin said. “If they cannot get crude oil because the strait is closed, they cannot refine it, and they cannot sell the finished products to us.”
Currently, 98% of the Philippines’ crude oil importation comes from the Middle East. Furthermore, 97% of liquid petroleum products and 91% of LPG are imported from Asian refineries that are themselves dependent on the Persian Gulf.
Why do prices go up even if there is no shortage?
Actual physical shortages are not the only factors driving local pump prices. Even if oil continues to flow, the mere threat of a closure increases costs as shipping companies face massive hikes in insurance premiums when traversing conflict zones, a cost eventually passed down to consumers.
Furthermore, tankers may be forced to take longer, more expensive routes to avoid the strait, significantly increasing logistics expenses.
Market speculation also plays a critical role through what traders call a risk premium, an immediate price hike baked into the cost of every barrel as soon as a conflict escalates.
Think of it as a “fear tax” added by global investors: they raise prices today based on the high probability of future trouble, meaning your gas at the pump gets more expensive the moment a threat is made, even if the physical flow of oil hasn’t been disrupted yet.
Is there a workaround?
According to Undersecretary Sandy Sales, some Middle East producers have built land-based pipelines to bypass the strait. Saudi Arabia operates a pipeline to the Red Sea, while Abu Dhabi has a line to the Gulf of Oman.
“The net effect is that we aren’t talking about the whole 16 million to 20 million barrels being off the table,” Sales said. “But the main risk is the pricing. The logistics and insurance will reflect in how high the price goes.”
What can we do to help?
While the global energy market remains volatile, the Inter-Agency Energy Efficiency and Conservation Committee (IAEECC) led by the Department of Energy is calling for a nationwide “culture of conservation” to strengthen the country’s energy security.
The agency has enjoined the public sector to lead by example, practicing fuel efficiency as a direct response to the uncertainty in the Middle East.
The DOE has listed several strict efficiency practices that serve as a practical guide for both government workers and the general public:
- Practice preventive maintenance: Regular vehicle maintenance ensures peak efficiency and prevents unnecessary fuel waste. This includes maintaining correct tire pressure, as under-inflated tires increase fuel consumption by up to 3%. Each 1 PSI drop below recommended levels wastes approximately 0.2% in fuel—costing private car owners about P209 per month and trucks up to P702 per month.
- Eliminate unnecessary idling: An idling engine produces zero movement and wastes 100% of fuel. Switching off the engine for stops of one minute or more eliminates these losses, as modern engines do not require warm-up idling beyond 30 to 60 seconds.
- Adopt smart monitoring: Implementing standardized vehicle monitoring systems helps track consumption and identify ways to cut non-essential trips.
- Transition to greener options: The government is encouraging a phased transition to electric or hybrid vehicles to reduce long-term petroleum dependence.
Secretary Garin emphasized that while the country’s fuel supply remains sufficient and stable, the participation of every Filipino is vital. “The energy family should lead the public by example… we appeal to the public to make energy efficiency a habit,” Garin said. She further noted that practicing these fuel and electricity-saving measures will greatly help the situation.
What is our government doing to manage the impact?
The Philippines is currently operating with a strong safety net to ensure energy stability. Energy officials confirmed that the country holds a 60-day inventory of fuel—triple the minimum requirement—providing a significant buffer against immediate supply disruptions.
To further ease the burden on the public, the DOE is coordinating with local oil firms to stagger price increases, preventing the “inflationary shock” of a sudden, large-scale hike at the pump.
President Ferdinand Marcos Jr. has also taken a proactive stance by seeking emergency powers from Congress to provide direct financial relief. Under this proposal, the President would have the authority to temporarily freeze or reduce excise taxes on petroleum if global prices remain high.
Coupled with existing plans for fuel subsidies and libreng sakay (free ride) programs for the transport sector, these measures aim to cushion the possible impact on the daily expenses of Filipino households.
As Secretary Garin noted, while the government remains vigilant, the primary focus is on pragmatic optimism, ensuring that the tools are in place to maintain economic resilience. (JLN/PIA-NCR)
0 Comments