G7 Oil Release Won't Lower Gas Prices Until Late Fall

The G7 has agreed to release 100 million barrels of oil from its strategic reserves to address the current energy crisis. The operation will be coordinated by the International Energy Agency and aims to make additional oil supplies available quickly.

The released oil is expected to reach the European market within a month, but this does not necessarily mean that oil prices at gas stations will immediately fall. According to Eurostat, oil prices in the EU are 8.3% higher than in July, with passenger transport fuels and lubricants being 23.8% higher than last year.

The main reason for the high oil prices is not just the increase in crude oil prices but also refining margins, which have more than tripled this year. In February, refining margins were at an average of 10 cents per liter of diesel, while in March they rose to 26 cents and reached 35 cents in the first three weeks of July.

The European Central Bank estimates that it takes one to two months for crude oil price increases to be fully passed through to pre-tax prices. As a result, the drop in oil prices will not be felt at the pump until late fall, provided there are no further supply disruptions and no new conflicts in the Gulf region.