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The Philippines' dependence on Middle East crude on the rise


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  • Author
  • Eric Yep
  • Editor
  • E Shailaja Nair
  • Commodity
  • Oil
  • Tags
  • dubai-crude Crude

The Philippines, the second-most populous country of Southeast Asia after Indonesia, upped its dependence on Middle Eastern crude supply in 2017, which is likely to persist as the region's oil production continues to decline.

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Growing reliance on Middle Eastern producers is detrimental to Manila's energy security, which is already at risk as offshore oil and gas reserves in the South China Sea remain underdeveloped and demand continues to rise on the back of steady economic growth.

Philippines saw its crude supply from the Middle East rise to nearly 90% of its total imports in 2017, from 87% in 2016, Rodela Romero, assistant director at the Oil Industry Management Bureau, said at the S&P Global Platts Energy Forum in Manila in March. Crude oil imports from Southeast Asian countries fell to 2.2% of the import mix in 2017 from 6.3% in 2016.

The Oil Industry Management Bureau is the planning arm of the government's Department of Energy.

The Philippines, which imports most of its oil requirements, saw its total crude imports drop to 73.94 million barrels in 2017 from 78.77 million barrels in 2016, although this was offset by a rise in product imports, according to DOE data.

Saudi Arabia was its largest supplier, accounting for 36.6% of the total crude imported in 2017, compared with 36.1% a year earlier. It helped compensate for the drop in imports from Kuwait, the second-largest supplier at 30.2% in 2017 compared with 33.6% in 2017.

Crude imports from the UAE, the third-largest supplier to the Philippines, also rose to 17.6% of the total in 2017, compared with 13.3% in 2016. Imports from Russia remained steady accounting for around 6.9% of the total.

The most notable drop in supply was from Indonesia, which fell to zero from 0.5%, and Malaysia, which fell to 1.2% from 5.3% in 2016, reflecting the decline in oil production in Southeast Asian countries.


The Philippines, a net energy importer, has been posting an average annual GDP growth of 6.3% since 2010, according to the Asian Development Bank, higher than most of its regional peers.

Consequently, its fuel demand has been rising, with petroleum product imports rising to 97.53 million barrels in 2017 from 86.11 million barrels in 2016, DOE data showed. Its two biggest suppliers of petroleum products -- China and South Korea -- accounted for 56% of its total imports in 2017.

The Philippines is attempting to build strategic petroleum reserves that will be administered and funded by the Philippines National Oil Corp., in partnership with the US Department of Energy and Japan's Ministry of Economy, Trade and Industry, according to government officials.

The need for strategic petroleum reserves is prompted by the high dependency on imports and vulnerability to natural hazards as the country is hit by as many as 20 typhoons every year, officials said on the sidelines of the forum last month. This will be in addition to the commercial reserves at its refineries.

The Philippines is the third most-vulnerable country to natural disasters in the world according to the World Risk Report 2016 and ranks fifth in the Germanwatch Global Climate Risk Index 2017.

The country has, however, yet to frame a firm policy on strategic reserves for crude oil, gasoline, diesel and LPG, and was still evaluating commercial and technical prospects, the officials said.

The Philippines is unlikely to get any reprieve from domestic production as offshore acreage in the South China Sea lies in waters contested by China. A pact signed with Beijing earlier this year for joint development is not expected to yield imminent results.

--Eric Yep,

--Edited by E Shailaja Nair,

(Updated to correct paragraph 5)