The president of the Board of Directors of the Dominican Refinery of Petroleum (Refidomsa), Leonardo Aguilera, warned yesterday that the war between Russia and Ukraine could cause a shortage of crude oil in international markets.
Aguilera pointed out that, according to the projections of investment banks, it is estimated that the cost of crude will exceed 125 dollars per barrel. However, she stated that, if the conflict worsens, as everything seems to indicate, then there would be no limits to the rise in the price of Petroleum.
Russia launched a military operation in Ukraine yesterday and its president, Vladimir Putin, warned other countries that any attempt to interfere with his country’s actions will result in “consequences they have never seen before.”
“That there may be a shortage (of oil), it is evident that there is,” Aguilera declared. “In fact there is, and that is what has been producing the increase in prices. The effect (of the armed conflict) is immediate. Yesterday (Wednesday), the Petroleum Texas, which serves as a reference for the country, closed at 92 (dollars) and right now (Thursday) it is at 101 dollars”.
Due to the military offensive, world stock markets fell. The administrator of the Banco de Reservas, Samuel Pereyra, affirmed yesterday that they continue to monitor the armed conflict and its impact on the stock and financial markets.
“We are going to see day by day the impact that (the Russian invasion of Ukraine) could have. We need to see what impact it could have here on the price of Petroleumwhich we see today is rising, and the impact it may have on the goods and services that the Dominican Republic imports,” he declared.
The president of the Association of Industries of the Dominican Republic (AIRD), Celso Juan Marranzini, explained that if the prices of Petroleum they shoot up, this affects plastic, chemical, petrochemical raw materials and also the transportation issue. In addition, he said that it has a direct effect on food.
Likewise, the deputy minister of internal trade of the Ministry of Industry, Commerce and MSMEs (MICM), Ramón Pérez Fermín, indicated that what is happening in Russia and Ukraine can affect the fuel supply chain on a global scale and that the same happens with the cereal market of the so-called grains. “Ukraine is a paradigmatic place in wheat production,” he stressed.
Beyond the impact of the conflict on the price of Petroleum and in commodities, the Dominican Republic has an economic relationship with both countries, which includes tourism and the export of products such as rum, cigarettes and fruit.
Russia was one of the sending countries that showed increases in the arrival of tourists to the country during 2021 compared to 2020. Only last year, 178,955 tourists residing in Russia and 65,413 in Ukraine arrived, according to Central Bank statistics.
The former represented 22.2% of European tourists who arrived by air and the latter 8.12%. Russia was the 46th destination of 147 countries where Dominican exports went in 2021; US$15.65 million was sent to that country.
Ukraine represents a more minority destination, occupying the 90th place. In 2021, what was sent to that country totaled US$0.99 million.
