Heating oil price skyrocketing, fault of USA and Iran (cross-border guide)

Context

In brief

• Heating oil prices skyrocket
• Cause: Iran-USA conflict
• Fuel price increase between 20% and 26%

Key facts

• What: Increase in heating oil prices
• When: September 2024
• Where: Switzerland
• Who: Homeowners
• Amount: 1400 dollars per ton

Homeowners in Switzerland must prepare for significant increases in heating oil prices. Prices have skyrocketed due to the new escalation in the Middle East. According to the comparison platform Heizoel24.ch, the prices of diesel contracts, which determine heating costs, have reached the highest level in the last five months. The contract for middle distillates, which determines the price of heating oil, is currently trading at around 1400 dollars per ton (1120 francs), more than double the level at the end of February, when it was around 700 dollars.

Causes of the surge

The cause of the surge can be found in the new flare-ups of the Iranian conflict, which keep the risk for oil transport high. But the increase in diesel is even more pronounced than that of crude oil. According to experts, the reason is that the continuous attacks on Russian refineries are reducing supply, while US stocks have fallen to the lowest level in the last thirty years.

Concrete examples

In Zurich, a homeowner using heating oil for a 150 square meter house could see an annual expense increase of about 500 francs, bringing the total to 2500 francs. In Geneva, where winter temperatures are generally milder, the increase could be less drastic but still significant, with an increase of about 300 francs.

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Operational details

Heating oil prices skyrocket, blame on USA and Iran

This shortage of supply, in the coming weeks, will add to an increase in demand. Andreas Flütsch, CEO of Migrol, the largest Swiss supplier of heating oil, predicts a "very high" demand for the coming months. Sales have so far been more than 20% lower than the previous year, because many homeowners probably hoped for a price drop, he explains in statements to the Awp agency.

Practical implications

As a result, many tanks in homes may be empty or poorly supplied. Flütsch warns that if winter arrives earlier than expected or lasts longer than usual, the increasing demand could further drive up prices. The professional's advice to customers is therefore to check the tank level promptly and not to postpone orders. "Those who want to reduce the price risk can purchase their needs in installments, rather than buying the entire annual quantity at once," he recommends.

As is known, the effects of the Middle Eastern conflict are also felt on fuel prices. According to the latest data from the Touring Club Svizzero (TCS) – released yesterday – the average cost of a liter of unleaded gasoline 95 is around 2.10 francs, 98 reaches 2.12 francs and diesel rises to 2.26 francs. The values are just one cent below the peaks reached last August 20. Since the start of the war in Iran, which broke out at the end of February, fuels have risen between 20% and 26%.

Checklist for consumers

1. Tank check: Check the heating oil tank level at least once a month. 2. Installment orders: Purchase heating oil needs in multiple orders, instead of a single annual purchase. 3. Price monitoring: Follow fuel price fluctuations through reliable sources such as the TCS. 4. Planning: Plan purchases based on weather forecasts to avoid surprises.

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Key points

Actions to Take

Swiss homeowners must be aware of the practical implications of these increases. It is essential to promptly check the tank level and plan purchases in a staggered manner to reduce price risk. For example, a homeowner in Zurich might decide to buy 1,000 liters of heating oil per month, instead of 2,000 liters every two months, to avoid spending peaks. Additionally, it is advisable to constantly monitor fuel and raw material prices to anticipate any further increases. A 0.10 franc per liter increase in heating oil price can mean a difference of 100 francs for a 1,000-liter tank.

Useful Tools

For further information and to calculate heating costs, you can use the salary calculator available on our website. This tool allows for an accurate estimate of costs and better planning of expenses. For example, a homeowner in Geneva can enter their annual heating oil consumption data and the current price to obtain an estimate of total winter costs. This can help better budget and make informed decisions on potential energy-saving measures.

In conclusion, the current situation requires careful management of energy resources to avoid further price increases. Following expert advice and using available tools can make a difference in containing costs.

"Careful management of energy resources is crucial to address the increases in heating oil prices," says a Swiss energy sector expert.

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