Manila: Domestic fuel prices are projected to rise as much as PHP4 per liter next week due to supply constraints and the latest military actions between the U.S. and Iran.

According to Philippines News Agency, Jetti Petroleum president Leo Bellas indicated that diesel prices are likely to increase between PHP2 to PHP4 per liter, while gasoline prices may either see a rollback or an increase by PHP1 per liter. Bellas shared these insights based on the price movements observed in the first four trading days of the week.

Bellas explained that even before the recent developments in the Middle East, prices of diesel and middle distillates had strengthened owing to firm demand and tightened supply, exacerbated by constrained physical availability. The potential loss of Russian diesel exports, due to intensified Ukrainian drone attacks damaging Russia's energy infrastructure, is also contributing to the price support.

Bellas also highlighted the weakening gasoline prices in Asia, noting that the regional market remained balanced amid ample supplies and steady demand. However, he warned that prices are likely to firm up globally as the Northern Hemisphere enters its peak summer demand season, compounded by supply constraints from refinery maintenances and run cuts.

The international jump in oil prices is attributed to the Iranian military strikes on July 7 targeting vessels in the Strait of Hormuz, followed by retaliatory actions by the U.S. and the revocation of U.S. sanctions relief for Iranian oil exports. Renewed fears of supply disruption are further fueled by the U.S. strikes on Iran on July 9 and subsequent Iranian attacks on U.S. infrastructures in neighboring Gulf states. The ongoing military tension in the Middle East continues to pose a risk to supply, with the escalation in the U.S.-Iran conflict diminishing hopes for a lasting peace deal.