Brent and the simplification of the actual fuel pricing chain
From TV talk shows to financial websites, we hear phrases such as ‘Brent has risen, so petrol prices will go up’ or ‘Brent has fallen, but prices at the pump aren’t following suit’. These phrases do not reflect reality.
Brent is not a single price but a pricing mechanism based on a basket of offshore crude oil grades, which serves as a global benchmark. Its name derives from Shell UK’s practice of naming its North Sea fields after seabirds. The field beginning with the letter ‘B’ was named after the Brent goose. Later, geologists observed that the five main layers of the field could form the acronym (Broom, Rannoch, Etive, Ness, Tarbert). The original field has run dry, but the benchmark survives as BFOET (Brent, Forties, Oseberg, Ekofisk, Troll). In 2023, the US WTI Midland (West Texas Intermediate from the Permian Basin) was added to maintain sufficient volumes and liquidity. Consequently, the Brent price is now also determined by shipments arriving from the US, a technical detail that is rarely mentioned.
The Brent price seen by the consumer is not the price of a barrel being loaded today in the North Sea. It is the result of a multi-layered trading system comprising the physical market (Dated Brent), futures contracts on the London-based ICE exchange, and Contracts for Difference (CFDs), which act as a bridge between the physical market (actual oil) and the exchange market (ICE contracts). When we hear that ‘Brent rose by $2 today’, this refers to the price of an exchange-traded contract and not the price of the physical cargo processed by a Greek refinery.
The three major misconceptions
Public debate on oil often leads to oversimplifications. Brent is presented as a direct determinant of the pump price, whereas the pricing chain is multi-layered and operates with a time lag. The confusion between the physical market and futures contracts creates false expectations about how the price at the pump will change.
The role of refineries
Refineries do not set prices based on Brent but on the prices of finished products in international spot markets. For Greece, this is primarily the Platts Mediterranean (CIF/FOB Med). The price of refined products is determined by independent markets with their own supply and demand dynamics (e.g. plant maintenance), seasonality (e.g. increased demand for petrol in summer) and regional imbalances (e.g. the Strait of Hormuz). The crude–product relationship is expressed in the crack spread (the refining margin between crude and the product), which can drive up the price of petrol even if Brent remains stable. Brent is the raw material, petrol is the refined product, and their relationship is not linear.
The dollar and the exchange rate factor
Brent and Platts are priced in dollars, whilst the consumer pays in euros. If Brent falls by 3 per cent but the euro weakens by 3 per cent, the import cost for Greek refineries remains the same. Exchange rates can offset or amplify international price movements, but are rarely mentioned in domestic reports.
Time lags, inventories and taxation
The time lag caused by stock levels affects prices. The supply chain is obliged to maintain strategic safety stocks. The fuel sold today was not purchased at today’s Brent price but at prices from weeks or months ago. Added to the final price are transport and operating costs, trade margins and, above all, taxation, which in Greece (excise duty and VAT) accounts for over 50–60 per cent of the final price. Even a 10 per cent fall in crude oil prices translates into a much smaller change at the petrol station.
In conclusion, Brent is an institution of the international energy market, not merely a figure. Its functioning links physical and financial markets. The pump is the final stage in a complex chain influenced by Platts, exchange rates, crack spreads, stocks and taxes. Simplifications breed mistrust, whilst the debate on fuel prices requires technical precision, because the reality of the energy market is more complex than the daily slogans.
Naftemporiki / Opinions, Tuesday, August 4, 2026