The Department of Energy (DOE) said Tuesday oil prices will continue to rise until the end of the year if supply constraints worsen due to the conflict in Israel.
“If we base it on the global Platts, up to the end of the year there will be a small deficit in world supply versus world demand. If demand goes up, prices goes up,” Rodela Romero, DOE director for the Oil Industry Management Bureau, said in an interview with PTV’s Punto Asintado Reload.
She said demand has been rising versus supply, “although demand sometimes goes down due to higher interest rates, the stronger US dollar, and weak economic activities.”
Romero said the outlook “sometimes diverges, especially when there are issues such as geopolitical and armed conflict such as the Israel war.”
“Oil prices went up in the first day of the trading day this week. Around $3 to $4 per barrel. But we need the whole week trading to quantify (the impact),” she said.
Romero said analysts are not expecting a long-term effect from the Israel attacks on the global oil market unless it escalates.
“We do not source from Israel, but its surrounding area in the Middle East. Iran is still on sanction, and Iran is not the only big producer,” she said.
Romero said the US and Saudi Arabia are the biggest producers of oil that can affect the global trend.
“If it escalates, it can have an effect because market uncertainties drive up prices,” she said.
An oil industry executive earlier said they are seeing “some similar warning signs of price volatility with this threat of war.”
“It will incur elevated pricing but we will wait and see how this will go during the next few days before it normalizes. By midweek, we will be able to read its initial impact on the pricing,” the source said.
This developed after local oil firms rolled back pump prices by as much a P3.05 per liter effective 6 a.m. Tuesday.
The oil firms cut the price of gasoline by P3.05 per liter, kerosene by P3 per liter, and diesel by P2.45 per liter to reflect the movement of prices in the world oil market.