Both Brent and West Texas Intermediate (WTI) barrels, the benchmark crude in the United States, reached highs in three years on Wednesday after President Donald Trump announced his plans to withdraw to the United States of the nuclear agreement with Iran and impose new sanctions to reduce oil exports from the third largest producer of OPEC.
This agreement is basically that Iran is committed to limit its sensitive nuclear activities ] and allow the entry of international inspectors in exchange for the lifting of economic sanctions. A part of the United States, in the agreement are (and have not withdrawn) the United Kingdom, France, China, Russia and Germany.
To understand the importance of these facts, Iran pumps about 4% of oil of the world and exports around 450,000 barrels per day (bpd) of crude oil to Europe.
The United States sanctions have a period of 180 days during which the buyers must "liquidate" their purchases of oil, which means that any loss of supply will not be immediately felt and companies do not have to rush to look for alternatives.
Trade ties between Spain and Iran remain strong not only in terms of oil, since they are Spanish imports from Iran amounted to 88,000 bpd in 2017 . Given the close relationship between the two countries, it is more likely that Spain will comply with the sanctions and cut its imports of crude from Iran due to the lower volume that the country needs to replace.
What justifies the rise in oil?
However, the Iran issue is the tip of the iceberg to justify the current high oil prices. To this day, the barrel of Brent -the European reference-, is at 77 dollars (64 euros) reflecting a rise of 15.33% so far this year.
If we get into the background, OPEC, led by Saudi Arabia, launched a price war against the United States United in 2015, increasing production to cause excess supply in the market . The movement caused quotes to fall to a minimum of $ 26, and left US industry reeling.
But prices recovered slowly. Fracking soared in the United States, and Congress lifted a 40-year ban on oil exports in 2016. Lovers of the "peak oil" theory have seen how in the last few months the United States has managed to overcome the levels of production reached in 1970 .
The International Energy Agency (IEA) announced in a new forecast that the growth in US oil production will cover 80% of the new world oil demand in the next three years ] United States oil production is expected to increase by almost 30% to 17 million bpd by 2023, and much of that growth comes from oil produced through fracking.
As a counterweight and to justify the price boom, OPEC and Russia, the world's largest producer, agreed in their new strategy to reduce their production to go consuming the excess of existing inventories. The world oil inventories fell an average of almost 0.6 million bpd in each of the last five quarters (January 2017 to March 2018).
Induaries are consumed by a intense world economic growth . Higher GDP growth has the potential to increase oil consumption above expected levels, which puts upward pressure on crude oil prices.
The equation must also be taken into account. ] geopolitical risks seen: The recent uncertainty about the agreement with Iran, the turmoil in Syria and the cuts in Venezuela have pushed prices up.
On this occasion, OPEC's strategy is having the desired effect . The strong economic growth of the world, boosts the energy demand but the growth of fracking is lower and this differential means consuming inventory and increasing prices upwards.
Gas oil and gasoline rise but not as much as Brent
However, the truth is that the prices of gasoline and diesel do not have a perfect correlation with the variations in crude oil since they are different markets, they are quoted in dollars and not in euros (exchange rate risk), and each country has its own peculiarities on the tax figures that fall on the fuels.
Taking into account all this, in Spain the prices of the Gasoline Super 95 and Diesel are in the 1.286 euros and the 1.191 euros respectively. At the beginning of the year, both fuels were at lower consumer prices and their increase was 3.46% for the Super 95 Gasoline and 4.36% for the Diesel .
date, if we compare both advances against the evolution of Brent, it is observed that the Brent has advanced 12 percentage points more than the fuels a positive element for the pocket of the consumers at the time of refueling their car and that does not reflect the whole rise of the barrel of oil.
During part of the past year, the euro had advanced on the dollar, which meant an increase in the purchasing power to import products in dollars (including fuel). However, in recent weeks the euro / dollar has fallen sharply leaving the pair at $ 1.1942 and a loss so far this year of -0.45%. Therefore, ** the currency factor is a negative point today **.