Global energy markets are reacting sharply to the outbreak of war with Iran with sudden increases in oil and gas prices. In Europe, gasoline and diesel prices have reached levels not seen in two years, forcing governments to revise budget forecasts. Experts warn of paralysis in air corridors and rising transport costs, which will ultimately hit consumers' wallets through higher inflation and food prices.

Drastic increase in fuel prices

Gasoline and diesel prices in Europe have reached the highest level in two years, causing panic among consumers.

Threat to aviation

Closure of air corridors due to the war with Iran forces longer flight routes, which will raise passenger ticket prices.

Revision of budget forecasts

The governments of the United Kingdom and Germany are forced to adjust financial plans due to the sudden increase in energy costs.

The outbreak of open armed conflict in Iran has caused an immediate shock to global commodity markets, pushing economic stability issues to the background. The main effect of the escalation is a sharp increase in crude oil prices, which translates into record fuel prices at stations in Germany, Poland, and Ireland. In many regions, the highest fuel prices in two years have been recorded, causing social anxiety and accusations against oil companies of excessive margins. The aviation industry signals serious disruptions in air corridors, which, according to pilots' unions, will inevitably lead to a drastic increase in ticket prices. The Middle East accounts for a significant portion of global oil extraction, and the Strait of Hormuz remains a key transit point, whose blockade has historically caused global energy crises.The political situation is becoming increasingly tense within European countries as well. British Chancellor of the Exchequer Rachel Reeves warned of the risk of rising energy bills, complicating the implementation of spring budget forecasts for the United Kingdom. In Germany, crisis summits are planned with the participation of economic representatives, aimed at developing protective mechanisms. At the same time, analysts point to the geopolitical consequences of the crisis: high oil prices could paradoxically fuel Russia's war budget, raising justified concerns in Kyiv, which is additionally struggling with an ammunition deficit. Italian consumer organizations estimate that the annual impact of the war on the budget of an average family could range from 614 to even 818 euros. Uneven market reactions are visible in gas prices – while slight declines were still noted in Italy in February, the new situation in Iran could, according to experts, reignite the debate in the European Union about returning to importing raw materials from Russia to stabilize the energy sector. Rising transport and energy costs are beginning to affect futures contract prices for grains, threatening another wave of food inflation. Eurozone countries, where inflation in January 2026 was 2.5 percent, are facing the specter of stagflation in the face of a new wave of uncertainty, as the war dashed hopes for a quick stabilization of living costs.

Mentioned People

  • Rachel Reeves — British Chancellor of the Exchequer warning about the impact of the war on household expenses.