Brent Falls to $72, Lowest Since February as Hormuz Reopens
Brent fell on Friday to around $72 a barrel, its lowest since February 27, with a daily drop of more than 4 percent as tanker traffic through the Strait of Hormuz speeds up.
- Brent fell on Friday to around $72 a barrel, its lowest level since February 27.
- The daily drop of more than 4 percent is tied to faster tanker traffic through the Strait of Hormuz.
- Persian Gulf exports are back to about 75 percent of pre-war levels, with loading resumed at Saudi Arabia's Ras Tanura terminal.
- Prices have returned close to where they stood before the war in Iran began.
Brent crude fell on Friday to around $72 a barrel, its lowest level since February 27, with a daily decline of more than 4 percent. The global benchmark has now erased almost the entire premium that markets had priced in during the war in Iran.
The trigger is geographically specific: tankers are once again moving quickly through the Strait of Hormuz, the chokepoint that carries a fifth of the world’s oil. The fear of a closure, which had kept prices above a psychological threshold for weeks, is fading as traffic returns to normal.
What is pushing prices down
Middle East supply is returning to the market faster than traders expected. Persian Gulf exports are back to about 75 percent of pre-war levels, and Saudi Arabia has resumed loading at the Ras Tanura terminal, Saudi Aramco’s largest export hub. The United Arab Emirates, Kuwait and Qatar are also increasing shipments.
When supply returns and the risk premium evaporates, prices react quickly. Brent has slipped back close to where it traded before the conflict began, meaning the entire war-driven spike has effectively been unwound. For oil importers, Serbia among them, that is relief on the cost side, because the crude that feeds refining and the retail fuel price is getting cheaper.
Two things should be kept separate: the global price of a barrel and the price at the domestic pump are not the same. Between them sit the dinar-to-dollar exchange rate, refiner and retailer margins, transport costs and, decisively for the final figure, excise duties and value-added tax. A 4 percent drop on the exchange does not translate one-to-one into the same drop at the pump.
What does this mean for fuel prices in Serbia?
Two opposing pressures collide here. On one side, a cheaper barrel lowers the cost of fuel and creates room for lower pump prices. On the other, the announced removal of the excise discount would push the other way: a higher excise per liter lifts the retail price regardless of cheaper crude.
The net effect depends on which force proves stronger and how long the global decline holds. If Brent stays near $72, the lower purchase price could partly absorb the return of the full excise, so drivers would feel less of the change. If oil prices spike again, say on fresh tensions in the Middle East, the loss of the discount and costlier crude would hit at the same time.
For now the market is lowering its risk pricing, not raising it. The question for drivers and for the budget is simple: will the cheaper barrel reach the pump before the full excise cancels out the difference?
