What’s Going on with Heating Oil and Other Fuel Prices?

You may have oil storage tanks at your property and have recently become aware that the country is experiencing what could politely be termed ‘economic issues’ right now. That means that prices have been rising across the board, whether that is the food we eat or the fuel we consume, with both of these being the most highlighted. 

We thought it would be useful if, in this edition of our blog, we looked into the reasons why fuel is becoming more expensive (and other reasons why your costs might increase) so that you can get a grip of the facts and appreciate the realities of the current situation, and so that you’re fully armed with the necessary information when the topic comes up in conversation!

Supply and Demand

The supply and demand cycle for heating oil changes through the year, mostly due to which season it is. Weather conditions obviously affect the rate at which you will use your oil, as you’re going to ‘stick the heating on’ when your property is colder, and you will therefore consume more fuel. This means the supply could be lower. When supply is low but demand is high, it is going to be more expensive to by the oil – and vice versa. If there is plenty of oil but lower demand then the price is going to be lower. Similarly, if you need a quick delivery of oil then you should definitely expect to pay more for it. The best course of action is to keep careful track of your quantity so that you can place non-urgent orders and fit into the regular delivery sweet-spot.

Extreme Weather and Other Disruptions

Other weather conditions can affect the price of oil. For instance, the most intense conditions such as storms or heavy ice or snow can mean that delivery schedules have to slow down and / or increase costs – and the price of the oil is likely to reflect this. Similarly, global events such as economic and political upheaval and the recent pandemic are always going to have an impact on the price of heating oil for the domestic market.

War!

Political upheaval is sometimes used as a euphemism for severe unrest, a developing conflict or, in fact, a war – and it was war which the world observed throughout 2022 in Ukraine. If the countries producing oil are involved in a war then this is likely to impact the supply of oil – and therefore the price of it. You may already know that Russia is the world's third-largest producer of oil. A large number of countries import a hugely significant amount of oil from Russia and, when they imposed sanctions on them, the supply became restricted – even though the demand remained high. This had a direct bearing on the price of oil.

Additional Costs

Financial phenomena such as exchange rates between countries can affect the cost of oil which has been imported from overseas. The actual cost of crude oil, from which your heating oil is derived, also changes. Therefore the cost of the oil you have delivered will alter in line with this. Similarly, any new policies or directives instigated by OPEC, the Organisation of Petroleum Exporting Companies, can have a bearing on the price of that crude oil – and therefore on domestic oil.

Here at Tanks R Us, we specialise in the supply and installation of a variety of tanks and boilers, and stock a huge range of oil tanks for sale to suit many purposes – including bunded oil tanks and other types of fuel and heating oil tanks. We offer an oil tank installation service, whether residential oil tanks or industrial (ie. for a business).