With the cost of crude oil constantly hitting new levels motorists are seeing average petrol prices at the pumps reach record highs. A series of geopolitical events is unfolding in Israel and Lebanon, as well as Iran, North Korea and Nigeria just as the summer holiday driving season gets underway in earnest. Analysts warn that as people pay more to fill up their tanks it will have a knock-on effect for businesses.
The average price in the 12 countries of the euro zone is now 1.30 euro a litre and in the UK it has reached 1.38 euro. US prices are near the highest they have ever been, but still to European minds a low 65 euro cents a litre, while Saudis are paying just 15 euro cents.
OPEC, which supplies more than a third of the world’s oil, sought to calm the market, and said there were more than sufficient supplies to meet global demand. In a statement the cartel said: “Geopolitical developments, over which OPEC has no influence, have been behind this sudden rise in volatility.” In June OPEC’s total oil output reached a seven month high of almost 29.8 million barrels per day.
Demand continues unabated. Motorists in the US – who use over 40% of the world’s petrol – have not cut back. They bought 1.7% more fuel in the past four weeks than they did in the same period a year ago.