Oil Prices higher on Iran sanctions fear

David Blevings, IPRA spokesman said, “We are seeing pressure again on global oil prices due to a number of factors; the recent fallout at the OPEC meeting over attempts to increase supply, increased demand for oil and the prospect of US sanctions on Iran which come into play next month. The concern is that OPEC and non OPEC countries may not be able to pick up the slack from the ‘lost’ Iranian supply. All of these factors continue to push the price of oil upwards with crude recently passing the £80/barrel mark which unfortunately has resulted in recent hefty increases at the pumps”.

Looking ahead to the Budget we note that at the recent Project 2040 event Government representatives said they will part-fund public transport and energy efficiency under the National Development Plan with an increase in the cost of petrol, diesel, home heating oil, gas and briquettes. Minister Naughten went further in a recent article and claimed that oil should be priced out of the market by 2030 to encourage people to adopt electric vehicles and energy efficiency suggesting a barrel price of €200/barrel as a baseline.

IPRA has urged the Minister not to raise duty rates in road fuels this year due to the current high cost of oil as any increase could offset the local economic recovery which is well underway and penalise rural car users.

“The recent increase at the pumps is unwelcome news for consumers and retailers who have no choice but to pass on increases in their wholesale costs. There is speculation that we could see further increases and claims of $100/barrel by the end of the year look unfortunately more realistic than we would like but the US has indicated that they may release some of their strategic oil reserves if oil peaks at $100/barrel which may see prices reducing in the medium term”, added David.