Oil prices seen to spike after US strikes on Iran

GLOBAL OIL PRICES are expected to soar amid a widening conflict in the Middle East after the US attacked Iranian nuclear sites.

- By Sheldeen Joy Talavera and Aubrey Rose A. Inosante Reporters

"World oil prices could rise further because of the new development. The potential increase in premium and freight, which are projected to rise because of the expanded scope of hostilities, could be factored in the expected movement on domestic prices next week," Jetti Petroleum, Inc. President Leo P. Bellas said in a Viber message.

The impact of the potential increase in freight would be determined "as soon as trading commences early (Monday) morning," Mr. Bellas said.

As of June 21, diesel is projected to go up by P4.90 to P5.10 per liter; and gasoline by P3.20 to P3.40 per liter, an industry player said.

If realized, this would be the sixth consecutive week of price hike for gasoline and four straight weeks for diesel.

The US launched airstrikes on three nuclear sites in Iran, US President Donald J. Trump said late on Saturday, saying these facilities "have been completely and totally obliterated," Reuters reported. (Related story "Strikes on Iran's nuclear sites mark Trump's riskiest foreign policy gamble" on page S1/9).

Mr. Bellas said that industry players are set to meet with the Department of Energy (DoE) on Monday to look for ways to cushion the impact of the looming bigtime price hike.

He said that the meeting aims "to discuss the implementation of the price increase (this week) on staggered basis, promos and discount offerings of stations to help mitigate the impact of the price increase, among other things."

Before the US attack on Saturday, analysts at Oxford Economics modeled three scenarios, including a de-escalation of the conflict, a complete shutdown in Iranian oil production and a closure of the Strait of Hormuz, "each with increasingly large impacts on global oil prices," Reuters reported.