This thesis analyzes the oil market, focusing especially on the formation and fluctuations of oil prices in the Republic of Croatia. The work is structured in four main chapters. In the introductory part, the methodology and objectives of the research are defined, and the general structure of the work is presented. The second chapter provides a theoretical framework for understanding the oil market. It is explained what oil and oil derivatives represent and how the oil market has developed throughout history. It was pointed out that monopolies were common in the past, but today OPEC plays significant role in shaping prices. It was also pointed out that oil is an inelastic commodity, which means that changes in prices have a limited impact on demand. The third chapter deals with the analysis of the oil market in the Republic of Croatia. It was particularly highlighted how retail fuel prices were formed, with an emphasis on changes after 2014, when free formation of prices was enabled. It is also pointed out that the government can limit prices in exceptional situations. Analyzing fuel prices in the period from 2013 to 2023, it is concluded that prices increased significantly in 2015 and 2022. The Republic of Croatia has an average price range compared to other European countries, except for liquefied petroleum gas, which is extremely expensive. However, it is important to note that the standard of living in these more expensive countries is also higher. In conclusion, the increase in fuel prices affected the increase in the prices of other goods and services, which resulted in a high rate of inflation in the Croatian economy.