The global oil market moved into surplus for the first time since the outbreak of the US-Iran war, with supply exceeding demand by almost two million barrels per day in October. However, the easing is unlikely to translate immediately into lower fuel and electricity bills for consumers in Cyprus.
The figures come from the International Energy Agency’s (IEA) monthly report, published on Friday and cited by the Financial Times.
The shift was driven mainly by increased shipments from the Gulf, despite Iranian attacks on vessels, alongside higher production elsewhere and weaker demand.
The IEA also revised its September figures to show a surplus of 600,000 barrels per day. It expects the market to remain in surplus during the fourth quarter and throughout 2027.
Global oil stocks rose in October for the first time since June, increasing by 1.7 million barrels per day.
“The oil market is showing tentative signs of rebalancing,” the agency’s analysts said.
Brent crude in the physical market is trading at around $95 a barrel, down from $136 in early October.
Fuel prices in Cyprus are falling unevenly
The easing in global oil prices is beginning to show in Cyprus, but the reductions vary considerably between fuel types.
According to figures from the Fuel Retail Price Observatory presented on Thursday by Consumer Protection Service Director Konstantinos Karagiorgis, the price of 95-octane unleaded petrol fell by 7.2 cents per litre over the past 30 days.
Heating oil dropped by 9.6 cents per litre, although this reduction also reflects the cut in excise duty.
Diesel, however, fell by just two cents per litre.
Why diesel prices remain high
The IEA report offers an explanation for the slower decline in diesel prices.
Most of the additional oil reaching the market is crude oil. While this supplies refineries with more raw material, it does not immediately address shortages of refined products because refining capacity remains limited.
As a result, diesel and aviation fuel prices remain persistently high despite the increase in crude oil supply.
Electricity bills will take longer to reflect lower oil prices
Consumers in Cyprus are also unlikely to see immediate relief in their electricity bills.
Household electricity prices increased by 5% in November, reaching 33 cents per kilowatt-hour, including VAT.
Christina Papadopoulou, spokesperson for the Electricity Authority of Cyprus (EAC), explained that changes in international oil prices are passed on to consumers with a delay.
The EAC maintains fuel reserves covering approximately two months, while fuel price adjustments are made at the end of each month.
This means that any reduction in international oil prices takes time to feed through to electricity bills.
Global reserves will take months to recover
Analysts have also warned that several months of surplus supply will be needed to replenish global stocks, particularly those of refined products.
“The world is focused on the flow and forgets that for eight months millions of barrels a day have been missing,” Spencer Dale, a professor at the London School of Economics, told the Financial Times.
Meanwhile, tensions in the Strait of Hormuz continue. Iran announced on Friday that an LNG tanker had struck a mine.
Also read: Electricity bills in Cyprus rise by 5% in November
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