Brent crude, the global oil benchmark, jumped more than six percent on Thursday, July 23 and briefly touched $100,14 a barrel, before easing slightly. Oil crosses the magically important $100 line per barrel due to the spread of the war in the Middle East and attacks on Saudi Arabian tankers. Brent has jumped to about $27 a barrel this month, an increase of more than a third. It last stopped above $100 on May 22, according to FactSet.
Fears about the global supply of oil are again relevant, but also because of the Yemeni rebels Houthis target Saudi ships in Red Sea, threatening to cut key outlet for Saudi Arabia's oil exports. The Kingdom was sending four to five million barrels of oil through the Red Sea and the Bab el Mandeb Strait, bypassing the Strait of Hormuz, writes CNN.
"Events over the past week, including the Houthi naval blockade, the lack of oil flow through the Strait of Hormuz, and a Ukrainian drone disrupting the flow of Kazakh oil from Russian export terminals, have pushed Brent crude oil prices above $100 a barrel," Hamad Hussein, climate and commodities economist at Capital Economics, told CNN. "Unless there are signs of de-escalation in the various conflicts, the risks to oil prices will only increase."
Serbia follows the jump
New fuel prices were announced in Serbia today (Friday, July 24), which will be valid until Friday, July 31. A liter of Eurodiesel will cost a maximum of 224 dinars per liter, and the price of Europremium BMB gasoline will be 200 dinars per liter. Last week, the price of Eurodiesel was 222 dinars per liter, and gasoline was 198 dinars per liter. This means that both diesel and gasoline went up in price by two dinars each.
Due to the renewed increase in the price of oil, after the renewed conflicts in the Middle East, the Government of Serbia made a decision to reduce the excise tax on fuel, by a total of 20 percent. The Government of Serbia recently amended the Decision on the temporary ban on the export of oil and oil derivatives, which extended the ban on the export of these derivatives until July 31.
Also, the Regulation on Amendments to the Regulation on Limiting the Price of Oil Derivatives was recently adopted, which allows registered agricultural farms to buy Eurodiesel at a maximum retail price of 184 dinars per liter, not only at NIS, but also at other motor fuel dealers.
We're spending our reserves again.
The Ministry of Mining and Energy has approved the use of operating reserves of Euro diesel to the oil companies that submitted a request to ensure safe supply of the domestic market, Minister Dubravka Đedović Handanović announced on July 23. She stated that the decision was made due to the increasingly complex situation on the world market, difficult imports due to the low water level of the rivers in the region and the seasonal increase in demand.
"Operational reserves make it possible to overcome the current difficulties in supply without spending state reserves, for oil companies to immediately get the fuel they need and for our market to be well supplied, as it has been so far," said Đedović Handanović.
She added that oil companies cannot currently rely sufficiently on the Danube, rail and road transport in order to import the planned quantities of fuel, which is why it is possible to use part of the operating reserves that they are obliged to maintain by law.
According to her, the ministry will enable the Oil Industry of Serbia (NIS) to, at its own request, make its operating reserves available to companies that have a greater demand for fuel from the domestic refinery due to reduced imports. Đedović Handanović pointed out that the ministry monitors the state of the oil derivatives market every day and that the state is ready to react in a timely manner in order to protect citizens and the economy.
She pointed out that the extension of the operating license of NIS, which expires on July 31, would enable the continuation of the delivery of crude oil to the Pancevo Oil Refinery and processing in the quantities needed to meet the increased demand.
She also reminded that the state reduced excise duties on petroleum products by 20 percent in the past few days in order to protect citizens and the economy from sudden price increases.
Aleksandar Vučić said in the middle of the month that he is currently thinking mostly about Serbia's economic progress and that his biggest concern is the price of oil. Regime tabloids reported this statement with headlines about the "superhuman struggle" of the president.
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