Green diesel prices continue to creep upwards, in light of continued tensions in the Middle East. This week, as we went to press, quotes for bulk orders of green diesel or marked gas oil (MGO) ranged from €1.39/l to €1.46/l including VAT.

At the start of August we reported that green diesel prices were ranging from €1.34/l to €1.40/l having jumped by as much as 38c/l over the space of a month.

This followed the initial break down in peace talks and return to hostilities between the US and Iran. To put this hike into context, bulk quotes had settled to lows of €1.02/l, including VAT in July.

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Brent crude

Brent crude, the global oil benchmark, was trading between $91-$92/barrel as we went to press, climbing steadily over the course of the past two weeks – having dropped down to $79/barrel at the start of the month.

Crude oil prices have risen as prospects for a new agreement between the US and Iran weakened, after US President Donald Trump said he was not interested in extending the interim peace deal. The memorandum of understanding signed in June, which was intended to give both sides 60 days to negotiate a longer-term peace agreement, officially expired on Monday. It’s understood that Iran and Oman continue to negotiate an arrangement for managing shipping through the Strait of Hormuz.

However, the US is not involved in the talks. It’s believed that the US is unlikely to back any deal that fails to ensure unrestricted passage through the shipping route. Reports say that Middle Eastern producers seem to be becoming very good at covertly moving oil through Hormuz to global buyers, while also supplying cargoes from outside the key chokepoint.

FCI

Despite, fuel prices remaining at elevated levels, the Government excise duty is set to be re-introduced on 1 September, with gradual restoration of all levies by 1 December.

Last week, the Association of Farm and Forestry Contractors in Ireland (FCI) issued a statement outlining that it had written to the Government urging that the full allocation of €100m fuel support scheme should remain in the sector. FCI outlined that unspent funding from the Fuel Support Scheme should be used to extend the scheme.

“Green diesel prices remain substantially higher than historic norms, placing continued financial pressure on farm and forestry contractors across the country; the need for targeted fuel support has not diminished – if anything, it has increased,” FCI national chair Norman Egar said.