Fuel Prices Remain Volatile Five Months After Iran Conflict

Global fuel markets have yet to settle down five months after the US and Israel opened a war with Iran. The latest data from the International Energy Agency (IEA) shows that diesel prices remain high, despite crude oil prices sliding throughout the summer.

The IEA's end-use price tracker, updated August 7, indicates that the average per-liter cost of automotive diesel across tracked countries is near $1.94 in US dollar terms, a 14% increase from February before the war began. This figure is actually higher than June's, even as crude oil prices dipped.

Gasoline prices, on the other hand, have eased to $1.90 per liter after peaking at $1.99 in May, remaining flat month-over-month.

The gap between diesel and gasoline prices can be attributed to the war's impact on supply chains. The conflict sent Brent crude soaring from around $72 a barrel to nearly $120 within weeks, with tanker traffic through the Strait of Hormuz grinding to a halt due to insurer reluctance and Iran's threats to attack any ship that attempted passage.

Crude prices have since retreated, but remain volatile as negotiations between Iran and Oman continue over the full reopening of the Strait. The IEA's country breakdown reveals that national taxes and currency fluctuations can greatly influence pump prices, with some countries experiencing price jumps while others saw declines.