Oil prices have risen again in the past year. Despite the large fluctuations and unrest in the oil market due to the war in Ukraine, the price increase was much lower than in 2021. Last year, the demand for fuel already increased considerably due to the economic recovery from the corona pandemic, and the price shot up.
A barrel of Brent oil, the benchmark for oil from the Middle East, Europe and Africa, is currently priced at about $84. That is about 6 percent more than at the beginning of the year. In 2021, Brent oil became more than 50 percent more expensive. A barrel of American WTI oil (159 litres) is now $ 79. That is about 4.5 percent more than at the beginning of 2022 and follows a price increase of 55 percent in 2021.
Oil prices have fluctuated widely this year. At the beginning of March, a peak of more than USD 130 per barrel was reached. That was the highest level since 2008. That advance followed the Russian invasion of Ukraine in February and concerns about the tight supply and uncertainty about fuel deliveries.
However, oil prices fell rapidly in the second half of this year. This was due to the interest rate hikes of the central banks, which wanted to combat high inflation. Higher interest rates not only curb inflation but also economic growth. As a result, fears of a recession flared up. During an economic downturn, the demand for oil decreases and prices fall.
The strict corona policy of China, the largest importer of oil in the world, also resulted in less demand for oil in that country. However, China has now let go of its strict corona policy, which means that Chinese oil demand is expected to increase again in 2023.
Motorists also noticed the unrest in the oil market at the pump. In June, the suggested retail price for petrol reached a record level of 2,504 euros. Likewise, the recommended price for a litre of diesel reached a record of almost 2.40 euros this year. It was striking that the price of petrol was much higher than in June 2008, when the price of crude oil reached a record. The main reason behind that was the expensive dollar. Oil is paid in dollars, but petrol is paid in euros at the pump.
Currently, the suggested retail price for a litre of Euro95 is 1,930 euros, according to data from consumer collective UnitedConsumers. The suggested retail price of diesel is now 1,913 euros per litre. In practice, motorists only pay the suggested retail prices along the highway. In October 2021, the recommended price for petrol exceeded 2.10 euros per litre for the first time.
