THE week-old United States-Israel war with Iran in the Middle East has disrupted the global supply chain of crude oil coming from that region. The Strait of Hormuz — the only sea passage from the Persian Gulf to the open ocean — was effectively closed to navigation due to Iran’s drone attacks.
The crisis began on Feb. 28, 2026, following joint US and Israeli military strikes on Iran — dubbed Operation Epic Fury — which reportedly included the killing of Supreme Leader Ali Khamenei. In response, Iran’s Islamic Revolutionary Guard Corps issued warnings prohibiting vessels from passing through the strait.
The Strait of Hormuz is one of the world’s most critical energy choke points. In 2025 alone, roughly 13 million barrels of crude oil per day passed through the narrow waterway — about 31 percent of all seaborne crude flows worldwide. With the security situation rapidly deteriorating, major shipping companies, including Maersk, MSC, Hapag-Lloyd and CMA CGM, have suspended operations through the strait and are rerouting vessels around Africa’s Cape of Good Hope.
The disruption has immediately rattled global energy markets. Brent crude prices surged by about 10 to 13 percent within days. When markets closed on Friday, Feb. 28 — just before the conflict escalated — Brent crude was trading at just over $73 per barrel. By Thursday, March 5, prices had climbed as high as $83 per barrel, with analysts warning that prices could reach $100 per barrel or more if the disruptions persist.
PH worst-impacted country
According to Dutch financial institution ING Group, nearly 90 percent of the Philippines’ crude oil imports come from the Middle East, making it one of the most severely impacted countries in the world in the current crisis. Unlike other Asian economies that maintain fuel subsidies and regulated pricing mechanisms to cushion price shocks, the Philippines has limited subsidies, and domestic fuel prices are largely driven by market forces.
Goldman Sachs estimates that a six-week closure of the Strait of Hormuz, with oil prices rising to $85 per barrel, could push Asian inflation up by about 0.7 percentage points. The Philippines and Thailand are expected to be among the most vulnerable to this inflationary spike.
Excise tax relief
Over the years, activists, transport groups and even some policymakers have repeatedly called for the immediate suspension of fuel excise taxes whenever global oil prices spike. These calls are often based on the belief that the government can simply trigger a provision under the Tax Reform for Acceleration and Inclusion (Train) Law to automatically suspend the tax once oil prices reach a certain level. But this repeated claim is legally inaccurate.
Under Republic Act 10963, or the Train Law, excise taxes on petroleum and fuel products were increased in three tranches from Jan. 1, 2018 to Jan. 1, 2020. The Train Law also included a provision that allowed the suspension of the scheduled excise tax increases if the average Dubai crude oil price, based on the Mean of Platts Singapore, reached $80 per barrel for three months prior to the scheduled increase.
The oft-cited Train Law provision — Section 148(m) — states:
“For the period covering 2018 to 2020, the scheduled increase in the excise tax on fuel as imposed in this section shall be suspended when the average Dubai crude oil price based on Mean of Platts Singapore for three months prior to the scheduled increase of the month reaches or exceeds $80 per barrel.”
However, this provision is now legally inoperative. The mechanism applied only to the scheduled excise tax increases during the 2018-2020 implementation period of the Train Law. These increases were already implemented on Jan. 1 of 2018, 2019 and 2020, after which the provision effectively expired.
The Department of Finance has confirmed that the provision referred solely to the temporary suspension of the scheduled increases, not to the permanent suspension of the excise taxes themselves. Consequently, the Train Law can no longer be invoked to suspend fuel excise taxes today.
At present, the Marcos administration has no automatic legal authority to suspend fuel excise taxes. Any such relief would require new legislation from Congress.
The Philippines operates one of the most market-driven fuel pricing systems in Asia, yet it lacks the policy buffers that many neighboring economies use to protect consumers from global energy shocks.
Every time oil prices spike, the same demand resurfaces: Suspend the excise tax. But the legal trigger in the Train Law died in 2020. Unless Congress enacts a new mechanism for tax relief or price stabilization, Filipino consumers will continue to bear the full impact of every geopolitical crisis that shakes the global oil market.
In law, as in economics, you cannot rely on a trigger that no longer exists.
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