Philippines pressed to tap SCS reserves as Iran war fuels oil shock

By Kenneth Christiane L. Basilio, Reporter

THE Philippines should resume exploration and consider tapping energy reserves within its exclusive economic zone (EEZ) in the South China Sea (SCS) to bolster its energy security, analysts said over the weekend, as the Iran war continues to disrupt global supplies and expose Manila’s vulnerability to oil shocks.

Developing oil and gas sources there would help the Philippines be insulated against global shocks and dampen price spikes, they said, stressing reserves must be tapped to achieve energy independence even as they acknowledge China’s growing coerciveness in the waterway could complicate drilling.

“The oil and gas reserves in the West Philippine Sea are one of the most direct levers we have for bringing down energy costs for every Filipino,” Noel M. Baga, co-convener of think tank Center for Energy Research and Policy, said in a Facebook Messenger chat, referring to parts of the South China Sea within the country’s 200-nautical mile EEZ.

Pushing into its third week, the Iran war has shown no sign of ending as both Washington and Tehran signal no desire for a ceasefire, prolonging a conflict in the energy-rich Middle East that has fueled oil spikes and sent shockwaves through global markets. This leaves the Philippines, a net oil importer, highly vulnerable to sharp swings in global prices.

“The Philippines imports a significant portion of its energy, which means Middle East disruptions translate quickly into higher electricity bills and fuel costs at home,” Mr. Baga said. “Developing domestic reserves would reduce that exposure and give the country more control over long-term energy pricing.”

The Philippines has offshore energy reserves, but lingering tensions in the South China Sea have stalled exploration there amid competing territorial claims. Its main energy source — the Malampaya gas field off the major island of Palawan — is projected to run dry by 2027.

Beijing claims nearly all of the South China Sea via a U-shaped, 1940s nine-dash line map that overlaps with the exclusive waters of the Philippines and its neighbors like Vietnam and Malaysia despite a 2016 ruling by the Permanent Court of Arbitration in The Hague that voided its claims.

The tribunal ruling held that the energy‑rich Reed Bank lies within the Philippines’ continental shelf, while a 2024 law defining the country’s maritime zones affirmed Manila’s sovereign rights to explore and exploit resources in the area.

“The legal foundation is already in place,” Mr. Baga said, noting the ruling gives the Philippines a “clear basis to develop these oil and gas resources.”

Efforts by Philippine companies to explore at Reed Bank have been hampered by the South China Sea dispute. The area may hold as much as 5.4 billion barrels of oil and 55.1 trillion cubic feet of natural gas, according to a 2013 report by the US Energy Information Administration.

Manila’s Energy department had suspended all exploration activities over the region since 2022 amid lingering territorial disputes.

Security experts said tapping the reserves is a necessary step toward energy independence, but warned Manila must stand firm as the move carries the risk of heightening tensions in the waterway.

“China maintains its dominance on gas exploration activities because the Philippines lacks a national roadmap to acknowledge its own resources in the oceans and lacks the ability to explore and exploit those energy deposits,” Chester B. Cabalza, founding president of Manila-based think tank International Development and Security Cooperation, said in a Facebook chat.

Vincent Kyle D. Parada, an Emerging Leaders fellow at think tank FACTS Asia, said the government needs to implement an industrial policy that will make extraction profitable for upstream oil companies.

“We need to understand that oil and gas exploration in the South China Sea isn’t just a maritime security issue — it’s an economic one,” he said in a Viber message. “Major expenditure, either from the government, the private sector, or both, will be necessary to explore and exploit those resources.”

Chinese maritime forces will likely attempt to block efforts by upstream companies to survey the area for energy reserves if the government allows it, defense economist Rocio Salle Gatdula said.

“They will likely respond with a mix of legal protests, gray-zone coercion — such as harassment by coast guard and maritime militia, water cannoning, ramming, and dangerous maneuvers — and economic or political pressure,” she said in a Facebook chat.

The Chinese Embassy in Manila did not immediately reply to a Viber message seeking comment.

Competing claims between the Philippines and China in the disputed waters have led to frequent confrontations involving repeated use of water cannons and sideswiping maneuvers against Philippine ships.

Ms. Gatdula said Philippine authorities would need to deploy a regular patrol of coast guard and navy ships alongside foreign vessels rotationally deployed by Manila’s allies to discourage Chinese forces from blocking attempts to survey the energy-rich region.

“There’s not much that Manila’s allies and partners can do short of maintaining a regular presence in the disputed territories,” Mr. Parada said. “What they can do, however, is invest in Philippine industry: loans, tech transfers and capacity-building initiatives.”