Iran’s nuclear program causes ‘jittery’ in world oil market

THE fear of nuclear program in Iran is currently causing jittery in the oil global market augmented by the recent oil embargo of six European countries against Iran, the world’s number three oil net exporter.

Director Zenaida Monsada of the Department of Energy Oil Industry Management Bureau bared this after the conclusion of a two-day advocacy campaign on July 14 in Western Visayas.

The advocacy campaign conducted in Iloilo City focused on the downstream oil industry provided in Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998.

Monsada said the unsteady geo-political factors in the Middle East greatly affects the international oil market prices highlighted by anxiety over the nuclear program of Iran and the oil embargo by six European countries that did not continue export contracts with Iran.

These unsteady political factors were further augmented by the oil blockade in the Strait of Hormuz, attacks on oil rigs, refineries, pipelines and installations in the Middle East and North America, and the attacks on oil vessels by pirates in Somalia.

Other factors affecting the global oil prices are the fundamental law on supply and demand, climate change and weather disturbances, the mixed economic signals to the oil market such as the rise and fall of the dollar against other currencies, interest rates of major oil users such as China, US and Europe, the US jobs data and debt cap and the Eurozone debt worries.

Monsada said all these factors are affecting the oil prices in the Philippines being a net importer of oil. While the US and China are world top oil producers, they cannot export oil due to their country’s high oil demand than supply situation.

The top five oil producers are Saudi Arabia, Russia, United States, China and Iran. The top five net exporters are Saudi Arabia, Russia, Iran, United Arab Emirate and Norway.

On the other hand, Monsada said the oil refineries in Batangas and Bataan showed low refinery output that is now pushing the volatile oil price increases in the country.

Similarly, the government has also stopped the implementation of the Oil Price Stabilization Fund (OPSF) to the oil companies after paying some P17 billion to the companies in the early 2000.

The energy department headed by Secretary Rene Almendraz is currently embarking in its energy reform agenda and energy security program for six years from 2010 to 2016 with a doable and sustainable energy development program. (LCP/Sunnex)