A significant rollback in oil prices is expected next week, with diesel estimated to decrease by up to P9.50 per liter and gasoline by P5, following the peace agreement between the United States and Iran that will reopen the Strait of Hormuz.
Background of the Crisis
The Strait of Hormuz was initially disrupted due to the Middle East crisis that began in late February, causing oil prices to rise to historic highs.
Expected Price Reductions
With the anticipated full reopening of the strait after the interim peace pact between the US and Iran—electronically signed by the leaders of both nations—diesel prices are expected to drop by P7.50 to P9.50 per liter, while gasoline prices will decrease by P3 to P5 per liter.
Statement from Jetti Petroleum President
In a message to reporters, Jetti Petroleum President Leo Bellas stated that "global oil prices fell this week as the market began pricing in the potential reopening of the Strait of Hormuz and the urgent return of Middle Eastern crude to the market, after the US and Iran reached an interim agreement."
He noted that the signed peace agreement gives US and Iranian negotiators 60 days to work on a final agreement.
Additionally, the appreciation of the peso against the US dollar also helped lower local oil prices.
