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We’ve all been enjoying lower prices at the pumps – since Summer 2014 in fact, but why has the price of petrol come down when historically they have only ever gone up?

Well, we’re in the middle of an oil price war – between the US and the Opec countries – made up mainly of the Middle East countries including Iran, Iraq, Saudi Arabia and Kuwait.

The US has hit upon vast reserves of shale oil, enabling it to increase production of oil over the last 7 years and become virtually self sufficient in energy production. However, the Opec countries have risen to the challenge, increasing production too, to drive down prices and cut off investment in shale exploration. And with increased supply comes cheaper prices – forcing the price of oil down to just over $50 dollars a barrel.

And whilst this is good news in the short term for us, the consumers, there is a cost.

The US shale oil pioneer Harold Hamm is suffering from this intense competition, losing over $6bn in the last 6 months. And Opec says it intends to continue pumping excess supplies of oil, increasing pressure on the US.

This is all going on in the wake of the recent nuclear agreement between the US and Iran, effectively opening the floodgates for Iranian oil to enter the market.

It’s all making for a volatile economy in the oil market, while the big players jockey for position and fight for world dominance. There’ll be winners and losers but right now it’s the consumers that are reaping the benefit. Only time will tell how long this will last!