Metro Manila, Philippines – Petron Corporation purchased 2.48 million barrels of crude oil from Russia to augment its inventory until June.
A report released by the Securities and Exchange Commission on Friday, March 27, said the purchase was made “out of extreme necessity” as the Middle East conflict has constricted oil supply.
The report stated that on Feb. 28, Petron’s shipment of two million barrels of crude oil was among the vessels barred from passing through the Strait of Hormuz as the US and Israel attacked Iran.
Its second shipment of two million barrels was canceled due to heightened risks in the Red Sea and the Strait of Hormuz.
“Acting out of extreme necessity and considering the abrupt cut in supply, the Corporation was thus constrained to procure Russian crude oil,” the regulator said.
Petron coordinated with the Department of Energy and the Department of Finance to secure the oil supply.
The company also issued a letter to the Bangko Sentral ng Pilipinas to make sure that there is no legal prohibition against sourcing foreign currency for import and trade transactions.
“A refinery shutdown due to failure to secure crude would lead to serious nationwide fuel shortages, sharp price spikes, panic buying, disruption to transportation and logistics, and broader economic dislocation,” the report said, noting the company’s significance as the country’s only local oil refinery accounting for 30% of the fuel supply market.
The company said it will consider purchasing Russian crude oil again should the current crisis persist and alternative sources remain insufficient.
