Fuel prices in Latvia are likely to remain relatively stable in the near future, with slight upward or downward fluctuations possible, given the continued uncertainty in the global market, according to Eva Legere, Chairman of the Board of Directors of the Latvian Association of Fuel Dealers.
The escalating tensions in the Middle East, especially between Iran and Israel, are having a significant impact on global oil markets, given the region's strategic importance as a major oil extraction and supply center, Legere told LETA.
By the end of the first week of the Iran-Israel conflict, oil prices rose from $69 to $77 per barrel, due to fears of the possible closure of the vital Strait of Hormuz, at a time when investment banks predicted that such a closure would cause prices to rise to $120 per barrel.
But prices fell back to around $67 a barrel after the US announced a temporary ceasefire between Tehran and Tel Aviv.
Legere explained that fuel prices in Latvia are mainly influenced by market prices at the Amsterdam-Rotterdam-Antwerp (ARA) ports, which are the main supply center for gasoline, diesel and biofuels in the Baltic region.
Prices at gas stations follow wholesale price movements after a short period of time, noting that the decisions of oil producing countries to increase or decrease production, and the speed of growth of the global economy, especially the slowdown in China and other major markets, are factors that strongly influence price trends.
Additional factors pressuring prices
Exchange rates - particularly the fluctuations of the euro against the U.S. dollar - directly affect fuel prices within Europe, along with seasonal factors, such as higher demand during the summer season, Leggera said.
"The Organization of the Petroleum Exporting Countries (OPEC) will remain a key player in determining market trends in the coming months, and any major changes in its decisions will be immediately reflected in global prices."
Official numbers
According to European Commission data, the average price of 95-octane gasoline in Latvia rose by 0.1% between June 17 and 23 to €1.534 per liter, while the average price of diesel fell by 0.1% to €1.478 per liter.
Despite the relative stability, Leggera cautioned that the outlook for fuel prices remains highly complex due to volatile geopolitical factors and global economic changes. With the Middle East still in limbo, sudden price jumps are not out of the question if the security situation in the region deteriorates.
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