Philippines down to its last three weeks of fuel reserves, turns to Russia for help

The Philippines is currently navigating a perilous and largely overlooked period of economic vulnerability: its national fuel supply could run out in around three to four weeks if international imports don't arrive soon. According to reports from The Manila Times, what was once a distant geopolitical risk has transformed into an immediate threat as the nation’s total reliance on foreign petroleum meets a tightening global supply chain.

At present, the Philippines imports up to 95% of its fuel and lacks a strategic reserve, meaning even a short-lived supply shock could quickly spill into transport disruption, rising food prices and pressure on essential services.

The catalyst for this instability is the effective closure of the Strait of Hormuz by Tehran and, in a retaliatory response to joint military action by American and Israeli forces against its territory, Iran's restriction on passage through this vital maritime artery, which typically facilitates the transit of 20% of the world’s petroleum. Iranian Foreign Minister Abbas Araghchi confirmed in a recent  Guardian report that the passage is currently restricted for specific vessels, while other shipping firms have voluntarily suspended passage due to the risk of Shahed-136 and Qader missile strikes from the coast.

The impact on global logistics has been swift. Insurance premiums for vessels entering these waters have effectively vanished, and despite previous assertions from Washington that US naval assets would provide armed escorts, The Guardian notes that enthusiasm from international allies for such a task force remains between low and non-exsitent. And with the Iranian mainland just 30km from the shipping lanes, military analysts suggest the advantage lies firmly with local forces, making the Strait a high-risk bottleneck for energy-importing nations.

The fragility of private inventories

Unlike most industrialised nations, the Philippines does not maintain a government-managed Strategic Petroleum Reserve (SPR). Instead, under the Downstream Oil Industry Deregulation Act of 1998, the country relies on mandatory minimum inventory levels held by private corporations. These are monitored by the Department of Energy (DOE), currently led by Secretary Sharon Garin, who stated in a GMA News Online report on March 12, that the nation holds a 50-day supply - including incoming orders.

However, industry insiders cited by The Manila Times contend that these official figures may be overly optimistic. Statutory requirements mandate that oil refiners hold approximately 30 days of crude or finished stock, while bulk importers must maintain roughly 15 days of supply, and retailers generally keep 7 days. Reports from the Philippines indicate that only Petron, which holds a 30% market share, consistently meets or exceeds these mandates. The remaining 70% of the market consists largely of importers holding much thinner stocks. When these fragmented inventories are adjusted for panic-buying patterns, analysts estimate the effective national safety margin is closer to 20 to 30 days or three to four weeks.

Philstar Global reports that on March 17, double-digit price hikes pushed diesel toward PHP100 ($1.67) per litre, marking the eleventh consecutive weekly increase. If the Middle East supply chain remains severed, the economic decay will likely accelerate as motorists and fleet operators rush to fill tanks, potentially compressing weeks of supply into mere days.

Diesel is the leading fuel for Philippine survival. It powers the trucks moving produce from farms to cities, the ocean going vessels connecting the islands around the archipelago, and the generators providing backup power to hospitals. Without it, the physical movement of goods stops, potentially leading to food shortages in urban centres.

In response to these pressures, Al Jazeera reports that the government has already begun exploring energy-saving measures, including a four-day workweek for state agencies to curb consumption.

Diplomatic hurdles and the search for alternatives

Logistically, the most efficient emergency partner is China, which operates the world’s largest refining network with a capacity exceeding 17mn barrels per day. Tankers from Chinese ports could reach Manila in three to five days, compared to the three-week journey from the Middle East. However, The Manila Times argues that the administration’s confrontational stance toward Beijing over South China Sea issues has complicated such a solution. Consequently, the government has turned toward Moscow.

Secretary Garin said to Philstar Global on March 17, that the Philippine National Oil Company (PNOC) has initiated contact with Russian energy firms. This move follows a decision by Washington to issue a 30-day waiver allowing the delivery of 100mn barrels of Russian oil currently at sea. Manila is also in preliminary discussions with Japan, Thailand, and Singapore, though these nations have their own supply priorities to manage.

The Philippine position is uniquely weak within the region. While Manila struggles with a sub-30-day buffer, other nations have built substantial safeguards. Japan holds reserves for approximately 200 days of consumption, while the United States maintains hundreds of millions of barrels in its SPR.

Both Thailand and Indonesia maintain more robust verified reserves, with Indonesia further benefiting from its own domestic production. As the clock ticks on the nation's remaining fuel, the current crisis highlights the urgent need for a state-controlled strategic reserve to protect the Philippines from the volatile shifts of global geopolitics.