background
As of: 08/16/2022 4:41 p.m
A whole bundle of reasons has been causing prices on the oil market and at gas stations to fall for more than two months. Drivers will soon have to reckon with higher costs again.
By Detlev Landmesser, tagesschau.de
The oil markets have been under constant stress for many months. The Russian attack on Ukraine temporarily caused crude oil prices to rise to unprecedented levels. Since the beginning of June, however, the prices have been falling again, almost continuously and at times significantly. Two months ago, a barrel (159 liters) of the US reference variety WTI paid more than 120 dollars, it is currently only a good 90 dollars. This is exactly the level before the Russian invasion in February.
How can the drop in prices, which is now also clearly noticeable at the petrol stations, be explained? A closer look at the commodity markets reveals a whole bunch of reasons. Overall, the crude oil markets are currently confronted with the prospect of increasing supply coupled with lower demand.
Iran sanctions could be lifted soon
On the supply side, the main expectation is that the nuclear deal with Iran will be revived and sanctions against Tehran will be lifted. Most recently, EU foreign policy chief Josep Borrell said that the text for the agreement was already in place. With the Islamic Republic, a major producer would return to the market. Any news in this direction has recently caused oil prices to fall.
And while the OPEC oil cartel is still unable or unwilling to produce much more, Libya has recently been producing appreciable quantities again. According to official figures, production in the civil war country has again reached 1.2 million barrels per day.
Concern about the global economy causes oil prices to fall
Added to these relieving factors on the supply side are growing concerns that global economic growth could weaken further. Such prospects always fuel the expectation of falling oil demand on the oil market. In both Europe and the USA, the current economic data point to continued stagnation in production. Most notably, the latest data from China has put oil prices under severe pressure.
Tank discount expires
This mixed situation brings drivers a welcome relief in times of high inflation. Fuel prices at filling stations have fallen significantly in parallel with the oil market. After the start of the Ukraine war, a liter of premium petrol usually cost over two euros, but recently it cost 1.71 euros – as much as it was at the beginning of February.
The tank discount naturally played an important role in this. Since the beginning of June, the federal government has lowered the energy tax on fuel to the European minimum rates. With the end of the tank discount at the end of the month, however, consumers will have to adjust to higher fuel prices again. The tax rate was reduced by 29.6 cents per liter for premium petrol and by 14.0 cents per liter for diesel. According to studies, this has largely been passed on to consumers.