What is the link between crude oil prices and refined product prices?
Crude oil is refined to produce products, such as petrol or diesel. Refined products are sold on the international market in the same way that crude oil is sold. The market factors that affect the price of crude oil also impact the price of refined products. As Shell only produces 2.5% of the world’s crude oil supply, we therefore need to buy crude oil and refine products on the international market. For New Zealand, we import crude oil and it is refined at Marsden Point Oil Refinery into petrol, diesel and other petroleum-based products like Jet fuel. Sometimes, we also import refined products directly into New Zealand as the Marsden Point Oil Refinery is unable to supply all of the volume that we need. Crude oil and refined products are traded in US dollars on a global market and the price fluctuates according to the market. OPEC (Organisation of Petroleum Exporting Countries) controls much of the world’s production of crude oil. Political instability in the oil producing countries h
