2023-08-12 15:01:10
It is not just the mercury that is likely to flare up in the coming days in France. After a lull during the second quarter, prices at the pump have been rising sharply for a month and the phenomenon should increase further in the coming weeks. At the beginning of August, for a liter of diesel, it takes an average of 1.80 euros, an increase of 14 cents in one month.
For unleaded (SP95 or E10), the trend is the same. It is on average at 1.89 euros per liter which means that it can be found at two euros in several petrol stations. Challenges explains the reasons for the inflation of diesel and unleaded while the August 15 bridge caused hundreds of kilometers of traffic jams this Saturday.
Read alsoOPEC: keep oil expensive to finance economic reconversion
Saudi Arabia chooses to reduce its supply
World leader in oil exports, Saudi Arabia has chosen to reduce its production of oil barrels by one million per day to go to a daily production of nine million. This operation mechanically pushed up world prices. The price of a barrel of Brent from the North Sea was around 86.81 dollars on Friday August 11, which corresponds to an increase of around 9% in one month. This is the seventh consecutive week of increases. The barrel in London is experiencing its highest level for eight months, and the American West Texas Intermediate (WTI) was approaching 83 dollars in New York. It is since May that the Saudi kingdom has announced a voluntary drop in its production of barrels.
This trend has just been confirmed at least until September and could even last until 2024. However, Saudi Aramco made a record profit last year of 161 billion dollars or some 147 billion euros. Dependent on China, its first customer, Saudi Arabia would seek to diversify its sources of income because of the disappointing economic results of Beijing. In the line of sight, the project “Vision 2030” which aims to get the country out of its dependence on oil launched by Crown Prince Mohammed Ben Salman in 2014. Analysts believe that the kingdom needs an oil price to 80 dollars a barrel to balance its budget and finance its transition, well above the averages recorded in recent years.
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Russia follows suit
In the wake of Saudi Arabia, Moscow has for its part committed to OPEC to lower its exports by 500,000 barrels/day in August, then by 300,000 barrels/day in September. This is one of the consequences of the war. in Ukraine and international sanctions targeting the country. These sanctions, in place since December 2022, require that only oil sold at a price equal to or less than 60 dollars (53 euros) per barrel can continue to be delivered. Since 2016, the two oil giants have been grouped together within OPEC+, which brings together twenty-two countries responsible for 40% of world supply.
Their objective is clear, while oil consumption is expected to rise again: to keep prices high. “Not only does the International Energy Agency (IEA) highlight the strong demand but it underlines the reduction in supply, in particular the production cuts decided by Saudi Arabia”, noted Matt Smith, analyst. at Kpler, interviewed by AFP. The decline in production and exports by these two major players in the oil market is likely to increase the summer expenses of motorists, at least until the end of the summer.
(With AFP)
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