Green diesel prices have been falling over the past week, as positive talks between the US and Iran to end hostilities continued. After the announcement over the weekend to formally end the war and fully open the Strait of Hormuz, oil prices have fallen further. This week, as we went to press, quotes for bulk orders of green diesel or Marked Gas Oil (MGO) ranged from €1.12/l to €1.18/l including VAT, with the majority of suppliers confident of further prices drops towards the weekend.

Prices are back by as much as 23c/l including VAT on our most recent fuel survey four weeks ago, when bulk quotes were averaging at €1.35/l. Winding the clock back further, prices have fallen by as much as 52c/l from highs of €1.64/l including VAT, during the height of the conflict in March and before the Government intervened with reductions in the tax take, mainly in the form of excise reductions.

“Green diesel prices have been trending downwards over the past week, as talks of a peace deal between the US and Iran drew closer. The positive news of a deal that came over the weekend saw prices drop 2c/l on Monday morning and a further 2.9c/l Monday evening. A further price drop is looking likely towards the weekend too,” one midlands supplier outlined.

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This time last year, green diesel prices were averaging in the region of 96-98c/l and were rising due to tensions in the Middle East, mainly between Israel and Iran, combined with Trump’s tariff talk at the time.

Brent crude

Brent Crude, the major oil benchmark which we often refer to, serves as a good barometer as to the direction fuel prices are headed. It dropped below $83/barrel on Monday and was hovering between $82-$83/barrel as we went to press.

Market analysts expect prices to come back further as the US and Iran officially sign the proposed peace deal on Friday 19 June in Switzerland.

However, it’s just the first step in what will be a long journey and one that will require an excess of crude supplies and lower shipping costs if markets are return to any sense of normality.

Estimates place the worlds loss of oil at 1bn to 1.5bn billion barrels since the war broke out at the end of February due to production cuts and shipping disruption – a volume that could potentially take years to replenish.

In the short term, the deal will be one of relief for Irish farmers and agricultural contractors providing it lasts, removing further energy and fertiliser price rises. That said, it will be seen in due course if and when prices will return to pre war levels.

The Government’s cuts in fuel excise duty are set to run to the end of July, which now look more likely not to be extended when the time comes.