Global oil markets have surged following the US and Israel’s attack on Iran on Saturday 28 February. At time of print, prices being quoted for bulk orders of 1,000l-plus of green diesel – or marked gas oil (MGO) as it is officially known – were ranging from €1.17/l to €1.21/l, including VAT based on an Irish Farmers Journal fuel survey.

This marks an increase of up to 21c/l since Friday last, when prices were hovering steadily between 96c/l and €1.02/l, including VAT.

According to a number of Irish suppliers, the market is extremely fluid with no signs of stability in sight amid the continued unrest in the Middle East.

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One supplier in the northwest noted that the market had spiked 6c/l first thing Monday morning, followed by 5c/l Monday evening and an additional 10c/l Tuesday morning.

The suppliers said that further increases were expected on Tuesday night, with 10-12c/l being estimated.

Almost all oil and fuel suppliers Irish Farmers Journal contacted initially refused to talk about prices, referencing the huge volatility in the market.

When customers are looking for prices, suppliers are quoting prices on delivery only.

“The national media outlets are driving many older people into panic buying,” said one Carlow fuel supplier.

“People who have lots of home heating oil in tanks, for example, are ringing panicking and looking for more. This in turn is creating a further spike in demand.”

Another supplier said that their phone hasn’t been as busy since the very start of the Covid-19 pandemic when huge uncertainty had caused markets to rally in a similar manner.

All suppliers expect further fuel price increases over the course of the coming week, given the uncertainty of the ongoing situation as the world watches and waits.

The Strait of Hormuz – the 33km-wide trade route bordered by Iran and Oman through which 20% of the world’s oil supply passes is a crucial trading route which now faces closure by Iran, causing global oil and gas shipping rates to soar.

Fears are also being expressed that Iran could strike oil production facilities in the Gulf region.

The posed risk of military conflict and cancelled insurance cover for ships transiting through the strait has resulted in hundreds of vessels being grounded in the region.

Avoiding the route significantly increases freight costs. Around 33% of the world’s fertiliser also passes through the channel. Although Ireland imports very little energy from the Gulf region, we will still feel the effect of such issues through global market pricing.

Brent crude

Brent crude, the major oil benchmark, has rose to highs not witnessed in over a year as a result of the attacks. At the time of print Brent crude was trading between $83 and $85/barrel, up from $70-$72/barrel on Friday afternoon.

As a general rule, fuel price fluctuations tend to trail behind crude oil markets, with any rises causing an almost immediate effect at the pumps. That’s despite a drop in price taking weeks to effect consumer pockets on the forecourt.