Manila: Domestic fuel prices are anticipated to decrease by as much as PHP1.50 per liter in the first week of August, amidst ongoing supply risks due to the conflict between the United States and Iran.

According to Philippines News Agency, Jetti Petroleum President Leo Bellas stated that based on the first four trading days of the week, diesel prices might see a reduction ranging from PHP0.50 to PHP1.00 per liter, while gasoline prices could drop by PHP1.00 to PHP1.50 per liter. This anticipated decrease contrasts sharply with the recent week's fuel price hikes of up to PHP7.30 per liter.

Bellas pointed out that the price of Brent crude saw a decline early in the week after previously exceeding USD100 per barrel, as optimism regarding the US-Iran truce mitigated some geopolitical risks. Despite the drop in crude prices, supply risks remain significant due to limited flows from the region through the Strait of Hormuz. He noted that prices surged once again with the resumption of airstrikes in the Middle East.

The dwindling US oil inventories have contributed further to supply concerns. However, Bellas mentioned that price hikes were partially countered by a proposed coalition aimed at enhancing maritime defense around the Red Sea, led by Saudi Arabia and supported by 14 Arab states.

Bellas also highlighted that refined products prices did not decrease as swiftly due to tight supply conditions. Diesel and gasoline products might face ongoing supply tightness as geopolitical tensions continue to disrupt refinery operations in the region.

In Asia, diesel prices have been supported by supply risks from the Middle East and Russia. Meanwhile, limited gasoline exports from China, due to mixed geopolitical signals across the Middle East and continuing Russian export bans, have tightened global gasoline markets and maintained relatively strong price levels.