Gasoline is becoming more and more expensive and is reaching a new record. The reasons lie in global trouble spots and geopolitical tensions.
Munich - In mid-April 2024, a visit to the gas station could become a source of concern for drivers: the current international crises have driven fuel prices up again.
The ADAC reports that the price of gasoline in Germany has reached a record high this year. The average price for a liter of E10 is currently around 1.87 euros, which corresponds to an increase of 1.6 cents compared to the previous week.
The main reason for the rise in gasoline prices is the increased price of crude oil, which is almost $90 per barrel of Brent crude. This is heavily influenced by several global conflicts that impact consumers' wallets:
Geopolitical tensions in the Middle East, particularly uncertainties arising from the conflicts between Israel and Palestine and Iran, are contributing to fuel prices rising. In the last two months, the price of crude oil has increased by about $12.
Gasoline and diesel are becoming more and more expensive
The price of diesel has also increased in recent weeks, although fortunately this development is currently stagnating: a liter of diesel currently costs just under 1.75 euros, which corresponds to a decrease of 1.2 cents compared to the previous week.
The cost of the “black gold” was driven up by reports of explosions in Iran and a possible Israeli attack, Handelsblatt
reports
. Investors on the stock markets are reacting with concern to the scenario of a renewed escalation in the Middle East.
Senior Israeli military officials said they had no choice but to respond to the attack from Tehran. This comes despite efforts by Western and Arab nations to dissuade Prime Minister Benjamin Netanyahu from such attacks. About a third of crude oil destined for global markets comes from this region, Bloomberg news agency explains, highlighting the potential impact.
Conflict between Israel and Iran: Energy and fuel prices rise
This has initiated a turnaround as oil prices had eased somewhat in the previous days in relation to the geopolitical situation.
The head of raw materials strategy at ING Group in Singapore, Warren Patterson, paints a dramatic picture of the developments. He tells Bloomberg that the events “could suggest that the worst fears have come true.” Specifically, he says we could be approaching a scenario “in which supply risks could become a reality.”
The conflict between Israel and Iran has an impact on energy and fuel prices: Due to the conflict, a geopolitical risk premium is added to the price of crude oil, which amounts to between 7 and 10 US dollars per barrel.
Another conflict is causing fuel prices to rise
In addition to the Middle East conflict, the war in Ukraine influences the cost of the “black gold”: Russia is one of the largest exporters and produces around two million barrels of diesel every day, half of which, according to the NZZ, is exported. However, due to the oil embargo, this only reaches the EU via third countries. If Ukraine attacks Russian oil refineries, it could likely have an impact on oil prices.
Another factor is the attacks by the Houthi militias in the Red Sea. Oil tankers have to take longer detours, which leads to delays and reduces availability. The OPEC organization (headquarters: Vienna) has not yet intervened to compensate for this shortage, reports Spiegel.
ADAC experts also expect that oil demand will increase as the global economy continues to grow, which could drive up fuel prices further.