Fuel Prices Rise in France Amid Middle East Tensions

French drivers are facing a renewed surge in fuel prices, reversing a recent period of calm at the pump. Diesel, in particular, has reached its highest level since mid-June, following an uninterrupted six-week decline.

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Maritime traffic in the strait, which had resumed in recent weeks, has become almost non-existent, although maritime authorities indicate that a navigation route remains open.

The uptick in prices is directly linked to escalating tensions in the Middle East, which have disrupted maritime traffic and driven up crude oil prices. The Brent crude barrel, which had hovered around $71 earlier in the month, is now trading near $78.75, a nearly 4% increase. This geopolitical instability has led to a near cessation of maritime traffic in key straits, despite assurances that a navigation route remains open.

Adding to the pressure on diesel prices is Russia's recent ban on diesel exports, a move intended to bolster domestic supply amidst disruptions from Ukrainian strikes on oil facilities. This supply-side constraint, coupled with historically high refining margins, is contributing to the price rebound.

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export ban on diesel [...] came into effect

As a result, the average price for a liter of diesel has climbed by 8.5 cents in a week to €1.9479. Gasoline prices have also seen increases, with SP95 at €1.9636 and SP95-E10 at €1.9232. Premium SP98 gasoline has now surpassed the €2 mark, reaching €2.0036, its highest point in a month.

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This dynamic is part of a context of historically high refining margins, with refiners benefiting from a relative disconnect between crude oil and petroleum product markets.