Oil prices surge in the Middle East show signs of prolongation despite record release of oil reserves

*This content was translated by AI.

Despite the announcement of production plans by oil-producing countries and optimistic supply outlook reports by international energy organizations, the actual domestic and foreign oil market indicators are in extreme mixed form, approaching an unprecedented high of $120 a barrel. According to the latest statistics from the Korea National Oil Corporation's oil price information service Opinet on the 12th, domestic gasoline prices have long exceeded 1,900 won per liter, and the average price in Seoul has settled in the mid 1,930 won range and is on the verge of exceeding 2,000 won.

In particular, gasoline prices at major gas stations in the Seoul metropolitan area, including Gangnam area, which has a large floating population, have already exceeded 2,100 won per liter, and the market is widely considered to have reached a critical point, overshadowing news of oil-producing countries' supply expansion. The steep rise in domestic oil prices is interpreted as a result of the "product price advantage" phenomenon, in which oil product prices have soared faster than international crude oil spot prices in the past month.

According to foreign media reports and market experts' analysis, geopolitical risks in the Middle East and Eastern Europe are completely engulfing the favorable factors of the increase in crude oil production. Recent physical clashes and threats of transportation blockades around major energy hubs such as Iran and Turkiye have led international market participants to assume the worst-case scenario of "transportation may not be possible even if production increases," triggering a surge of up to $119.50 during the day based on Brent. Although the U.S. administration's expected remarks on the end of the war or the G7's move to jointly release strategic reserves caused a temporary decline, the fear of supply chain disruptions underlying the market still strongly supports Opinet's domestic sales prices.

In particular, domestic oil prices have fluctuated vertically from the late 1,700 won per liter to 2,000 won per liter, weakening consumers' real purchasing power while international oil prices are riding a roller coaster. The phenomenon of "surging refining margins" due to the aging of global refining facilities and lack of investment is also considered to be a major reason why domestic oil prices do not fall even when crude oil prices fall. Experts warn that if the demand explosion of the upcoming summer driving season and the regularization of geopolitical tensions combine, the current high price range is likely to go beyond the temporary phenomenon and become a "new normal."

In conclusion, the real-time Opinet indicators show that prices in the metropolitan area between 1,900 and 2,000 won more accurately reflect market instability than the ostensible figures of oil-producing countries, and oil prices are not expected to stop for the time being to reach $120 per barrel unless the safety of energy transportation routes is guaranteed.

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*This content was translated by AI.