The escalating tension between the United States and Iran following the assassination of Iran’s Quds Force Commander Qassem Soleimani is expected to have an immediate effect to Mindanao particularly on the pricing of oil and other oil-based products like fertilizer.
European Chamber of Commerce of the Philippines (ECCP) Southern Mindanao Business Council chair Antonio S. Peralta told media that if the tension between the two countries will escalate the immediate major effect will be the price of oil.
Peralta cited that the oil coming from oil producing countries in the Middle East passes through the Strait of Hormuz, which is a sea boundary between Iran and Iraq. Roughly 80 percent of oil that passes through Hormuz is headed to the rest of Asia.
“It only takes Iran to say ‘we will not allow any vessels to go to the western world’ and because of that what happens then is you increase the prices of oil and everybody gets affected by that,” Peralta said.
Peralta foresees more expensive cost for oil-based products such as fertilizer. He said it will impact agricultural commodities in Mindanao as fertilizer will become more expensive as well as other industries that are dependent on oil.
“Right now I am sure a number of planners in the government and the private sector are running at econometric model to see ano ang impact niyan. They are now looking at the impact as it would also affect their businesses. Looking at the pricing of oil for instance, before that attacks we were looking at oil features at 70 dollars per barrel. I dread to think now that it would remain at that level,” he said.
Peralta is optimistic that the Philippine government maintains a very good position as it has no difficult situation with Iran and the US.
A war between the two countries is feared to erupt after Iran sent ballistic missile attacks on Iraqi bases hosting American forces yesterday (January 8).