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Manila Bulletin devider Business devider Trade & Industry devider Think tank flags Philippines' fuel supply risk from Houthi threat

Think tank flags Philippines' fuel supply risk from Houthi threat

Published Jul 17, 2026 03:11 pm
A gas station in Jaro, Iloilo City, displays “sold out” sign on its pump last March 10. The fuel depletion comes as the country faces a historic energy crisis, with industry experts warning that domestic supplies may only last until late April due to escalating conflict in the Middle East and regional export bans.
A gas station in Jaro, Iloilo City, displays “sold out” sign on its pump last March 10. The fuel depletion comes as the country faces a historic energy crisis, with industry experts warning that domestic supplies may only last until late April due to escalating conflict in the Middle East and regional export bans.

The Philippines stands as one of the countries most vulnerable to fuel shortages amid reports of Houthi threats to close the Bab el-Mandeb Strait, according to think tank Capital Economics.

“The reliance of several Asian economies, especially Pakistan, the Philippines and Japan, on oil exports from Saudi Arabia means those economies would be at greatest risk of experiencing fuel shortages,” Capital Economics said in a July 16 report.

Saudi Arabia supplies almost half of the Philippines’ crude oil imports, Capital Economics data showed. Saudi Arabia also accounts for nearly 60 percent of Pakistan’s crude oil imports and about 40 percent of Japan’s.

The Philippines is currently under a state of national energy emergency due to global oil price and supply shocks caused by the prolonged war in the Middle East, as the country remains a net energy importer.

Capital Economics data showed that daily vessel arrivals through the Bab el-Mandeb Strait fell sharply after Houthi attacks began in late 2023 and have yet to recover.

The think tank said the closure of the Bab el-Mandeb Strait would significantly lengthen shipping routes for tankers delivering Saudi oil to Asia, further tightening the global oil market.

“The only option remaining for Saudi oil to reach global markets would be via the Suez Canal. While not a problem for European importers, such a diversion would mean that in order to reach Asia, tankers would need to take [around] 6,500-kilometer (km) longer journeys through the Mediterranean and around Africa, adding about 10 to 12 days to reach their destinations,” the report said.

While the Bab el-Mandeb Strait already serves as a key shipping route for Saudi Arabian oil bound for Asia, most container ships have been avoiding the Red Sea because of Houthi attacks, heightening supply disruptions and economic risks for Asian economies.

The report stated that if both the Bab el-Mandeb Strait and the Strait of Hormuz were to close, global oil prices could rise by an additional $15 to $20 per barrel on top of the prevailing Brent crude benchmark price.

The Houthis (Ansar Allah) are a Yemen-based political and military movement threatening to block the Bab el-Mandeb Strait by attacking ships in the Red Sea in solidarity with Palestinians amid the Middle East war and to target Israeli and Western interests.

Iran declared the closure of the Strait of Hormuz in March following United States (US) attacks. Its closure has remained in effect as of July following the US strikes on more than 140 Iranian targets, which triggered the global oil price spike. - Danielle T. Bayani

Related Tags

Capital Economics Middle East war state of national energy emergency Houthi oil crisis
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