THERE are growing concerns in the Pacific tonight that fuel prices will jump in the coming weeks following the Israeli and US attacks on Iran, and Iran’s subsequent response.
With shipping through the Strait of Hormuz suspended, 20 per cent of global gas and oil supplies could be affected, eventually forcing crude prices as high as $USD100 per barrel.
Experts have described the threat to the Pacific energy sector as severe, with island fuel prices already generally high and volatile due to import dependency and shipping distance.
Glen Craig, Vanuatu’s special envoy for international development, told RNZ Pacific the severity of the impact would depend on whether the duration of the conflict outpaced a Pacific nation’s petroleum reserves.
“We should be okay, but it depends on how big and how long this conflict is going to go on,” he said.
Craig said the crisis would begin to affect the region—mainly on the supermarket shelves, at fuel pumps, and in airline ticket prices—in about four months.
Papua New Guinea’s Foreign Minister Justin Tkatchenko saw some potential upside for his country as a petroleum and oil exporter. “It will definitely benefit PNG, but then there’s the other side, where fuel prices for the domestic market will then go up,” Tkatchenko said.
PNG is predominantly a petroleum gas exporter, with China, Japan, and Taiwan as its biggest importers. The crisis may offer PNG opportunities to increase exports and fill an expected global shortage.
“Unfortunately, it’s the consumers that will cop it, the people, and they are the ones that end up paying for it,” Tkatchenko said.
Meanwhile, the Melanesian Spearhead Group (MSG) Secretariat has expressed concern over the escalating conflict in the Middle East, calling for an urgent and peaceful resolution in line with international law.
Acting Director-General Ilan Kiloe stressed the need to uphold international principles under the United Nations Charter.
He warned that prolonged instability in the Middle East would have global consequences, including for vulnerable economies.
“The MSG Secretariat recognises that prolonged instability in the Middle East will pose greater risks to global stability, with consequences extending far beyond the region that will disproportionately affect vulnerable economies.”