BARREL PRICE. The price of a barrel of oil fell on Wednesday morning, in particular because of the slightest threat of an embargo from the European Union on Russian gas. Very dependent on Russian extractions, Europe remains cautious, for the moment.
[Mis à jour le 9 mars 2022 à 12h45] Oil prices are starting to fall again this Wednesday, March 9. After Joe Biden’s resounding announcement, the President of the United States to impose a embargo on Russian gas, Europe is much more reluctant to this idea. This is why the price of a barrel of oil has calmed down somewhat, measured at $125 for the barrel of Brent. Beware, however, of the volatility of oil prices, which are extremely dependent on upcoming European decisions and the progress of the war in Ukraine. The latter had familiarized with the $140 last Sunday, a few euros from the 2008 record. That is an increase of 33% of the barrel of oil since the first clashes in the Donbass. In this unprecedented context, the member countries of the International Energy Agency (IEA) should release no less than 60 million barrels of oil of their reserves. One objective, to stabilize a market in panic.
So, should we expect a further rise in fuel prices in France, when the prices charged are already reaching record highs? Absolutely. The purchasing power of low-income households is likely to take a hit. The price per liter now easily exceeds 2 euros, a finding that should become widespread throughout the country in the coming weeks. Fuel prices being strongly indexed to the price of a barrel of oil, de facto, a constant increase in prices at the pump is to be expected. French consumers could well be the first victims of a potential embargo. Difficult for Europe to turn around quickly, alternatives are possible, but they will take time before being put in place.
The war in Ukraine casts doubt on the supply and price of energy. Aside from gas, one question remains central and arouses curiosity, what is the price per barrel of oil in this mess? Rising almost constantly since December 2021, the price of a barrel has reached the price of $139 this Sunday, March 6, 2022.
When you fill up with gas, the taxes represent 60% full. And these taxes, they, in spite of the war in Ukraine, fluctuate rather little. In particular the domestic consumption tax on energy products (TICPE), which simply represents the fourth revenue of the State, behind VAT, income tax and corporate tax. the fuel price leaving the refinery, it corresponds to 1/3 full of gasoline. Notably influenced by the price of a barrel of oil on international markets. Gas station attendants will have no choice but to pass on this increase to the price per litre.
The price at the pump could therefore increase several cents compared to the usual prices. Keep in mind that there is a lag time between the increase in the purchase price of a barrel of oil and the real impact on prices at the pump. This time varies 8 to 10 days about. The increase should therefore take place at the end of the week, or the beginning of next week. In an attempt to curb this phenomenon, several aids have been put in place and distributed by the Government. In particular the inflation bonus granted to 38 million low-income households, as well as the revaluation of the mileage scale for 2.5 million tax households. The threat of a embargo European on Russian gas could cause the price of a barrel of oil to explode at $300or even more.
According to INSEE, the Russia is the 3rd world producer of oil with 10 million barrels per day, of which 2 million transit to Europe. The Franceshe matters 9% of its crude oil since Russia. And the countries which could substitute the major role of Russia in the export of oil are not legion. Nigeria, Angola and Libya, for example, are not even meeting their own production targets. the Nigeria (9.6% of oil imports in France), theAlgeria (10.3%), and theSaudi Arabia (11.8%) remain crucial trading partners for France to whom the government could turn more to supply the country.
“We have large strategic oil stocks that cover almost three months of consumption and allow us to deal with supply disruptions. The French are not at risk of running out of fuel or gas for heating in the coming months” declared the Minister for the Ecological Transition, Barbara Pompili on February 23. The European Union could even decide to release part of its strategic oil stocks to counter the rise in fuel prices in the face of this major market disruption. A decision taken only three times in history, for example after Hurricane Katrina in the United States.