Oil market returning to surplus as Gulf exports recover, IEA says — where fuel prices stand in Latvia

The world oil market is returning to surplus as exports from the Gulf recover, the International Energy Agency (IEA) said in its monthly oil market report on Friday, 13 November. It is the first time since the start of the war in Iran that the agency expects a quarterly surplus rather than a deficit. The IEA expects supply to average 105 million barrels a day in the fourth quarter, 1.7 million more than demand, Reuters reported.

What the IEA said

Gulf exports, excluding Oman, rose to 18.4 million barrels a day in October but remained 26% below pre-war levels. Crude exports reached 15 million barrels a day, or 82% of pre-war levels, while exports of refined products and liquefied gas were at roughly half. Saudi Arabia and Iraq led the recovery. Global oil supply rose by 2.3 million barrels a day in October to 105.4 million.

The IEA estimates that oil demand will fall by 2.7 million barrels a day this year to 102.3 million. The agency warned that attacks on tankers and energy infrastructure still threaten supply, and that onshore stocks are at their lowest since at least 2016.

North Sea Dated Brent has fallen 32% from a high of $136 a barrel on 8 October to about $93, but remains $22 above its pre-war level, according to the IEA. Brent futures traded at about $96 a barrel on Friday after the report was published.

Diesel still expensive

The IEA said tight diesel supply remained the market’s main concern. European diesel prices fell 11% over the period but, at close to $180 a barrel, were still 77% above pre-war levels. IEA member countries will speed up the release of emergency diesel stocks over the coming months to ease the shortage.

Prices in Latvia

According to the latest European Commission Weekly Oil Bulletin, petrol 95 averaged €1.846 a litre in Latvia on 9 November, diesel €2.083 and LPG (autogas) €1.088. Over the week, petrol fell by 2.2 cents, diesel by 1.6 cents and LPG rose by 1.1 cents.

Compared with 28 September, when petrol 95 cost €2.038 and diesel €2.133, petrol is 19.2 cents a litre cheaper and diesel only 5 cents. Both fuels are slightly cheaper in Latvia than the EU average: petrol by 3.1 cents and diesel by 1.4 cents.

Excise duty and VAT make up a large share of the price of a litre, so swings in oil prices reach the pump more weakly and with a delay. The IEA report contains no forecast for pump prices.