Australia’s oil price is at a three-month low as markets react to hopes of improved US-Iran relations. Multiple outlets report that the decline in crude oil prices is weighing on fuel costs, with expectations that petrol prices at the bowser may ease. The reports link the movement to sentiment around potential de-escalation following prospects of a US-Iran peace arrangement, which is reducing risk premiums in oil markets.
The articles also note that changes to government support are affecting what motorists pay. They say the federal government’s 32 cents-a-litre fuel discount is ending, which would normally lift pump prices. Despite the end of the discount, the lower underlying oil price is prompting hopes that overall fuel pricing could still be lower than it otherwise would have been.
Taken together, the sources present a situation where two forces are moving prices in opposite directions: oil prices fall on peace hopes, while the withdrawal of the federal discount provides upward pressure on pump prices.
